An international policy goal is to orientate mental health services around the support of 'recovery': the development of new meaning and purpose in one's life, irrespective of the presence or absence of symptoms of mental illness. Current progress towards a recovery orientation in mental health services is summarized, indicating that pro-recovery policy is in advance of both scientific evidence and clinical practice. Key evaluation challenges are outlined, and indicators of a recovery focus are described. These include quality standards, consumer-clinician interaction styles, and belief and discourse markers. This underpins a proposal for a new approach to service evaluation, which combines attainment of objectively-valued social roles and of subjective-valued personal goals. This approach has applicability as a methodology both for clinical trials and routine practice.