Objective To investigate the financing status for mental health service in Shanghai, and provide policy advice for improvement of mental health financing mechanism in Shanghai. Methods The income status (government investment, medical income, drug income and the other income) and expenditure status (special financial expenditure, personnel expenditure, public expenditure and individual and family subsidiary expenditure) of Shanghai Mental Health Center and 19 district mental health centers of Shanghai in 2008 were investigated with self-designed questionnaires, and the data of total income and total expenditure of Shanghai mental health institutions in 2008 was obtained. Results The total income of Shanghai mental health institutions in 2008 was 774.610 0 million yuan, and government investment, medical income, drug income and the other income accounted for 21.37％, 48.34%, 28.25% and 2.04%, respectively. The total expenditure of Shanghai mental health institutions in 2008 was 863.399 8 million yuan, and special financial expenditure, personnel expenditure, public expenditure and individual and family subsidiary expenditure accounted for 8.45％, 40.91％, 47.39％ and 3.25％, respectively. Conclusion The government investment in mental health service is relatively lower in Shanghai. Government should invest more in mental health service, and establish a multichannel, multidirectional and multilevel financing mode.