The Hijra community is a cultural and gender grouping in South Asia broadly similar to western transgender communities, but with literature suggesting some differences in gender experience and patterns of psychosocial adversity. The present study aims to describe patterns of mental illness and psychoactive substance use in Hijra subjects and study their association with gender experience and psychosocial adversity. Fifty self-identified Hijras availing HIV-prevention services in New Delhi, India, were interviewed. Data on mental disorders, psychoactive substance use, quality of life, discrimination, empowerment, violence and gender identity were assessed using structured instruments. Subjects were mostly in their mid-twenties, and had joined the Hijra community in their mid-teens. More subjects (46%) were involved in begging than in traditional Hijra roles (38%). Sex work was reported by 28% subjects. The rates of lifetime mental illness was 38%, most commonly alcohol abuse (26%); others had anxiety or depressive disorders (8% each), somatoform disorders (6%) and bulimia nervosa (n = 1). Disempowerment was mostly experienced in domains of autonomy and community participation; 52% had experienced sexual or psychological violence. Discrimination was attributed to gender (100%), appearance (28%) or sexual orientation (28%). There were negative correlations between the physical domain of WHO-QOL and physical violence and depression scores; and between discrimination and WHO-QOL environmental, physical and psychological domains. This Hijra group showed high rates of mental disorder and substance involvement, related to QOL domains and experiences of discrimination and disempowerment.