INTRODUCTION: Psychiatric issues present a challenge in the treatment of patients with multidrug-resistant tuberculosis (MDR-TB). Both baseline psychiatric disorders and development of psychiatric complications related to anti-tuberculosis drugs and psychosocial factors require aggressive management. SETTING: A community-based non-governmental health organization in Lima, Peru. OBJECTIVE: To review the literature for psychiatric complications associated with anti-tuberculosis medications, to describe the incidence and prevalence of depression, anxiety and psychosis among individuals receiving MDR-TB therapy, and to detail the management approach used in this cohort. METHODS: A retrospective case series was performed among the first 75 patients to receive individualized MDR-TB therapy in Lima, Peru, between 1996 and 1999. RESULTS: Baseline depression and baseline anxiety were observed in respectively 52.2% and 8.7% of this cohort. Most individuals with baseline depression experienced improvement of depressive symptoms during the course of TB therapy. The incidence of depression, anxiety and psychosis during MDR-TB treatment was 13.3%, 12.0% and 12.0%, respectively. While the majority of individuals with depression, anxiety and psychosis required psychiatric pharmacotherapy, cycloserine was successfully continued in all but one case. CONCLUSION: Psychiatric comorbidities are not a contraindication to MDR-TB therapy. Management of psychiatric complications is possible without compromising anti-tuberculosis treatment.