Abstract Chronic diseases are now the leading cause of death and disability within developed countries. An increasing awareness of how individuals cope with chronic, life-long health problems has required clinicians to develop alternative models of care to those traditionally used for acute medical illness. Concepts such as the biopsychosocial model of illness, stigma, expert patients, treatment adherence and the recovery model are crucial to the understanding of how patients with chronic illness should be managed. The diagnosis of a life-long medical condition requires an individual to make a number of adjustments, and may contribute to the development of psychiatric illness. Rates of psychiatric disorders, such as depression and anxiety, are increased at least two-fold amongst individuals with chronic medical problems. There is increasing evidence that depression may also be a risk factor in the development of some chronic diseases, especially those related to lifestyle, such as type 2 diabetes and cardiovascular disease and may influence their prognosis. As a result the early detection and management of psychiatric morbidity in those with chronic illness is essential.