BACKGROUND: While there is a growing body of epidemiological evidence on the prevalence of mental illnesses in late-life in developing countries, there is limited data on cultural perceptions of mental illnesses and care arrangement for older people. METHOD: This qualitative study used focus group discussions with older people and key informants to investigate the status of older people and concepts of late-life mental health conditions, particularly dementia and depression, in Goa, India. RESULTS: Vignettes of depression and dementia were widely recognized. However, neither condition was thought to constitute a health condition. Dementia was construed as a normal part of ageing and was not perceived as requiring medical care. Thus, primary health physicians rarely saw this condition in their clinical work, but community health workers frequently recognized individuals with dementia. Depression was a common presentation in primary care, but infrequently diagnosed. Both late-life mental disorders were attributed to abuse, neglect, or lack of love on the part of children towards a parent. There was evidence that the system of family care and support for older persons was less reliable than has been claimed. Care was often conditional upon the child's expectation of inheriting the parent's property. Care for those with dependency needs was almost entirely family-based with little or no formal services. Unsurprisingly, fear for the future, and in particular 'dependency anxiety' was commonplace among older Goans. CONCLUSIONS: There is a need to raise awareness about mental disorders in late-life in the community and among health professionals, and to improve access to appropriate health care for the elderly with mental illness. The study suggests directions for the future development of locally appropriate support services, such as involving the comprehensive network of community health workers.