This paper describes main facts about Chile starting with key socio-demographic, socio-economic, political, environmental, epidemiological, social support and social pathology aspects that characterize the context in which current mental and neurological policy and programmes have been put in place since 2000, as part of the National Health Plan and Health Sector Strategy Plan. The 'National Plan for Mental Health and Psychiatry', using a community psychiatry approach, has been partially implemented for people covered by the Public Health Insurance, which comprises 62% of the Chilean population (people with lower income). This paper also describes: the management, population needs and demands, financial resources, human resources in primary care, mental health specialist care and community-based care, physical capital, social capital, provision and processes, and outcomes of the plan. Strengths are analyzed, like the health reform, including its values and principles, the active participation of consumer and family groups as well as mental health NGOs, access to mental health services through primary care, quality assurance of the mental health services delivered to the population and progressive development of a culture of respect for human rights, including those of people with mental illnesses. Finally, difficulties for the advance of mental health care are also enumerated: the low priority still given to mental health compared with physical health by the country's leaders, the insufficient emphasis on mental health in both undergraduate and postgraduate professional training, the strong stigma and discrimination associated with mental illness in the general population and the advocacy by some mental health professionals of the traditional model of care (role of the psychiatric hospital).