The self had a central role in early theories of psychopathology and has long been of interest to mental health practitioners. However, these early theories typically made what we consider to be two key errors: they conceptualized mental ill-health as constituting discrete categories of illness, and they conceptualized the self as inherently individualized and stable. There is a growing recognition in psychiatry and clinical psychology of the former error, with a change well underway to reconceptualize psychopathology in terms of transdiagnostic continua of symptoms rather than as discrete categories. At the same time, modern understandings of self-processes acknowledge their fluid, socially structured, and context-sensitive nature. Here, we argue that the integration of these two perspectives-into a self-categorization model of mental health with a healthy social self-system at its core-can provide new insights into both the nature of mental health and ill-health and the relevant focus for intervention. We illustrate this by exploring the implications of our analysis for three conditions (depression, schizophrenia, and autism) and report the findings of a verification study with experts in both social identity theorizing and clinical practice. We conclude by proposing key priorities for future research on self-categorization in mental health. (PsycInfo Database Record (c) 2025 APA, all rights reserved).