In this article I will argue that we are witnessing at this moment the third wave of biological psychiatry. This framework conceptualizes mental disorders as brain disorders of a special kind that requires a multilevel approach ranging from genes to psychosocial mechanisms. In contrast to earlier biological psychiatry approaches, the mental plays a more prominent role in the third wave. This will become apparent by discussing the recent controversy evolving around the recently published DSM-5 and the competing transdiagnostic Research Domain Criteria approach of the National Institute of Mental Health that is build on concepts of cognitive neuroscience. A look at current conceptualizations in biological psychiatry as well as at some discussions in current philosophy of mind on situated cognition, reveals that the thesis, that mental brain disorders are brain disorders has to be qualified with respect to how mental states are constituted and with respect to multilevel explanations of which factors contribute to stable patterns of psychopathological signs and symptoms.