Background: In low-and middle-income settings, many people with mental health problems cannot or do not access psychiatric services. Few studies of people with epilepsy and mental problems have evaluated the effectiveness of a predominantly psycho-social intervention, delivered by lay community workers. The aim of this study was to assess the effectiveness of a community-based complex mental health intervention within informal urban communities while simultaneously addressing social determinants of mental health among disadvantaged people with severe and common mental disorders (CMDs), and epilepsy. Methods: In this observational, prospective cohort study set in Uttarakhand, India, the lay-worker led intervention included psychoeducation, behavioural activation, facilitation of access to care, and facilitated psycho-social support groups. Participants were categorised as having a severe or CMD or epilepsy and assessed 5 times over 24 months using primary outcome measures, including the Patient Health Questionnaire (PHQ9) (severity of depression), the World Health Organization Disability Assessment Schedule (WHODAS 2.0), the Recovery Star, and scoring of a bespoke Engagement Index. Analysis included descriptive statistics as well as hierarchical linear regression models to report fixed effects as regression coefficients. Results: Among the 297 (baseline) participants only 96 people (31%) regularly used psychotropic medication (at least 4 weeks) and over 60% could not or did not consult a psychiatrist at all in the study period. Nonetheless, people with CMDs showed a significant reduction in their depression severity (PHQ9: B =-6.94, 95% CI-7.37 to-6.51), while people with severe mental disorders (SMDs) showed a significant reduction in their disability score (WHODAS 2.0: B =-4.86, 95% CI-7.14 to-2.57). People with epilepsy also reduced their disability score (WHODAS 2.0: B =-5.22, 95% CI-7.29 to-3.15). Conclusion: This study shows significant improvements in mental health, depression, recovery, disability and social engagement for people with common and SMDs, and epilepsy, through a community-based intervention that was non-pharmaceutical. It provides preliminary evidence of the value of predominantly psycho-social interventions implemented by lay health workers among people with limited or no access to psychiatric services.