While there is increasing evidence of an association between poor mental health and the experience of poverty and deprivation, the relationship is complex. We discuss the epidemiological data on mental illness among the different socio-economic groups, look at the cause -effect debate on poverty and mental illness and the nature of mental distress and disorders related to poverty. Issues related to individual versus area-based poverty, relative poverty and the impact of poverty on woman's and child mental health are presented. This review also addresses factors associated with poverty and the difficulties in the measurement of mental health and illness and levels/impact of poverty.