Aims: Although mental health problems are common among drug treatment consumers, little is known about how mental health issues are discussed by service providers or understood by clients within treatment settings. We analysed how co-occurring drug and mental health problems are discussed in treatment settings, specifically the use and understanding of clinical terminology (e.g. ‘comorbidity’ or ‘dual diagnosis’). Method: 77 drug treatment consumers and 18 service providers in Australia were interviewed about barriers and incentives to treatment for people with co-occurring drug and mental health problems. Findings: Consumers had low levels of understanding of clinical terminology for co-occurring drug and mental health problems, except for those who had accessed literature or participated in programs developed by drug user organisations. Service providers recognised low levels of consumer mental health literacy, and advocated a client-centred approach that avoided the use of clinical terminology. Conclusions: Providers should encourage consumers to discuss mental health problems, and should not avoid using clinical terminology as this may undermine the development of mental health literacy among consumers. Treatment services may benefit from working with drug user organisations to develop resources aimed at improving awareness and understanding of mental health problems among drug treatment consumers.