The Royal Government of Bhutan pursues and promotes a policy of providing well integrated, equitable, cost-effective and balanced health services consisting of preventive, promotive, curative and rehabilitative programmes through its primary health care system. The government has accorded high priority to social sectors like health and education. However, there are serious concerns regarding the quality of care provided to persons with mental disorder, who on this account are subjected to stigma, discrimination and human rights abuses. This article aims to analyse, examine and highlight the policy and issues of the mental healthcare system in Bhutan. It focuses on the mental healthcare system with reference to services, policies and issues and to advocate for better policy development for mental health.