The issue of the severity of psychiatric disorders has great clinical importance. For example, severity influences decisions about level of care, and affects decisions to seek government assistance due to psychiatric disability. Controversy exists as to the efficacy of antidepressants across the spectrum of depression severity, and whether patients with severe depression should be preferentially treated with medication rather than psychotherapy. Measures of severity are used to evaluate outcome in treatment studies and may be used as meaningful endpoints in clinical practice. But, what does it mean to say that someone has a severe illness? Does severity refer to the number of symptoms a patient is experiencing? To the intensity of the symptoms? To symptom frequency or persistence? To the impact of symptoms on functioning or on quality of life? To the likelihood of the illness resulting in permanent disability or death? Putting aside the issue of how severity should be operationalized, another consideration is whether severity should be conceptualized similarly for all illnesses or be disorder specific. In this paper, we examine how severity is characterized in research and contemporary psychiatric diagnostic systems, with a special focus on depression and personality disorders. Our review shows that the DSM‐5 has defined the severity of various disorders in different ways, and that researchers have adopted a myriad of ways of defining severity for both depression and personality disorders, although the severity of the former was predominantly defined according to scores on symptom rating scales, whereas the severity of the latter was often linked with impairments in functioning. Because the functional impact of symptom‐defined disorders depends on factors extrinsic to those disorders, such as self‐efficacy, resilience, coping ability, social support, cultural and social expectations, as well as the responsibilities related to one's primary role function and the availability of others to assume those responsibilities, we argue that the severity of such disorders should be defined independently from functional impairment.