This report contains a theoretical discussion of psychiatric diagnosis and reflects a broad cross-cultural perspective. The current theory that appears to underlie psychiatric diagnosis in biomedicine is outlined and examined from the standpoint of its similarities and differences to diagnostic systems in other, more elementary, systems of medicine. Problems posed by the nature of psychiatric illness, as these relate more broadly to the theory and enterprise of diagnosis and classification, are reviewed. The report addresses the nature of category structure models in psychiatry, the differences between the classification of illness and natural objects, the influence of symbolic/cultural/historical factors in psychiatric illness ascertainment, different parameters of a measurement approach to psychiatric diagnosis, and the problem of co-occurrence of psychiatric illness. Whenever possible, the rationale and system of DSM-III is used for purposes of discussion and illustration. The aim of the report is to outline and review these and related factors to conceptualize the enterprise of psychiatric illness diagnosis in a broad comparative social medical frame of reference.