This chapter provides an overview of conceptual and ethical issues surrounding mental capacity and supported decision-making in mental healthcare. Mental capacity (also referred to as “competence to consent” or “decision-making capacity”) is the ability of a person to understand the nature and consequences of the available treatment options and to make a treatment decision based on her own values and deeply held preferences. Supported decision-making in the context of healthcare refers to interventions that can enhance the ability of persons to make treatment decisions based on their own values and deeply held preferences. This concept plays a key role in the United Nations (UN) Convention on the Rights of Persons with Disabilities (CRPD). The chapter starts by shedding light on the wider societal significance of the concept of mental capacity by embedding it in discussions around autonomy and paternalism. It subsequently elucidates three approaches to mental capacity: the status approach, the functional approach, and the outcome approach. Then it describes the nature of supported decision-making interventions and legal supported decision-making arrangements. The chapter closes by considering four controversies surrounding mental capacity and supported decision-making, namely those concerning whether the criteria of the functional approach are sufficient for mental capacity, whether mental capacity is risk-relative, whether supported decision-making can fully replace substitute decision-making, and whether the concept of mental capacity is inherently discriminatory.