We examined how community attitudes towards traditional Chinese conceptions of health and Western dichotomization of illness might affect perceptions of traditional Chinese medicine (TCM) efficacy in order to identify factors underlying psychiatric service underutilization among Chinese-Americans. We administered an experimental vignette to assess perceived illness, severity, and beliefs of TCM efficacy for physical and psychiatric disorders among 90 Chinese-Americans ascertained through a national telephone survey. Perceived illness severity was unrelated to assessment of TCM effectiveness. However, psychiatric conditions tended to be viewed as distinct from physical disorders, and TCM use was endorsed as less effective for psychiatric illnesses when compared with physical illnesses. Furthermore, differences in perceived TCM efficacy appeared to be magnified among US-born respondents, with US-born respondents endorsing lower efficacy for psychiatric disorders than foreign-born respondents. These findings suggest that TCM use for psychiatric disorders may decrease with Westernization, but might delay access to psychiatric services among first-generation immigrants.