The government of India has, over the past decade, implemented the "integration" of traditional, complementary and alternative medical (TCAM) practitioners, specifically practitioners of Ayurveda, Yoga and Naturopathy, Unani, Siddha, Sowa-rigpa, and Homoeopathy (collectively known by the acronym AYUSH), in government health services. A range of operational and ethical challenges has manifested during this process of large health system reform. We explored the practices and perceptions of health system actors, in relation to AYUSH providers' roles in government health services in three Indian states - Kerala, Meghalaya, and Delhi. Research methods included 196 in-depth interviews with a range of health policy and system actors and beneficiaries, between February and October 2012, and review of national, state, and district-level policy documents relating to AYUSH integration. The thematic 'framework' approach was applied to analyze data from the interviews, and systematic content analysis performed on policy documents. We found that the roles of AYUSH providers are frequently ambiguously stated and variably interpreted, in relation to various aspects of their practice, such as outpatient care, prescribing rights, emergency duties, obstetric services, night duties, and referrals across systems of medicine. Work sharing is variously interpreted by different health system actors as complementing allopathic practice with AYUSH practice, or allopathic practice, by AYUSH providers to supplement the work of allopathic practitioners. Interactions among AYUSH practitioners and their health system colleagues frequently take place in a context of partial information, preconceived notions, power imbalances, and mistrust. In some notable instances, collegial relationships and apt divisions of responsibilities are observed. Widespread normative ambivalence around the roles of AYUSH providers, complicated by the logistical constraints prevalent in poorly resourced systems, has the potential to undermine the therapeutic practices and motivation of AYUSH providers, as well as the overall efficiency and performance of integrated health services.