BACKGROUND: National policy on medical pluralism in India encourages the mainstreaming of AYUSH (Ayurveda, Yoga, Unani, Siddha, and Homeopathy) systems and the revitalization of local health traditions (LHT). In Meghalaya state in the northeast, the main LHT is its indigenous tribal traditional medicine. This paper presents the perceptions of tribal medicine and of AYUSH systems among various policy actors and locates the tribal medicine of Meghalaya within the policy on medical pluralism currently being implemented in the state, a region that is ethnically and culturally different and predominantly inhabited by indigenous peoples. METHODS: A stakeholder mapping exercise identified appropriate policy actors and 46 in-depth interviews were conducted with policy makers, doctors, academics, members of healer associations and elders of the community. A further 44 interviews were conducted with 24 Khasi and 20 Garo traditional healers. Interview data were supplemented with document analysis and observations. Qualitative data were analyzed using thematic content analysis that incorporated elements of grounded theory. RESULTS: In Meghalaya there is high awareness and utilization of tribal medicine, but no visible efforts by the public sector to support or engage with healers. The AYUSH systems in contrast had little local acceptance but promotion of these systems has led to a substantial increase in AYUSH doctors, particularly homeopaths, in rural areas. Policy actors outside the health department saw an important role for tribal medicine due to its popularity, local belief in its efficacy and its cultural resonance. The need to engage with healers to enhance referral, training, documentation and research of tribal medicine was made. CONCLUSIONS: The wide acceptance of tribal medicine suggests that tribal medicine needs to be supported. The results of the study question the process of the implementation of the 'mainstreaming AYUSH' policy for Meghalaya and highlight the importance of contextualizing health policy within the local culture. A potential role for Health Policy and Systems Research (HPSR) at sub-national levels is also highlighted.