Background: Lack of awareness has alarmingly raised the proportion of drug noncompliance among psychiatric patients, which are proven worrisome not only to the patients but also to their caregivers. An individually tailored family psychoeducation will address the issue by enhancing the knowledge among patients and their caregivers. Aim: The aim of this study is to assess the efficacy of family psychoeducation on drug compliance, self-esteem, and caregiver's burden among psychotic and mood disorder patients in a selected tertiary care center, Uttarakhand, India. Methods: A quasi-experimental study was performed among 120 participants using total enumerative sampling in a general hospital psychiatric ward. Data were collected from patients and caregivers using the Medication Adherence Rating Scale, Rosenberg Self-esteem Scale, and Zarit burden interview-22. The outcome measures were evaluated in the 2 and 4 th weeks, and data were analyzed using the descriptive (frequency, percentage) and inferential statistics (Friedman analysis of variance, Wilcoxon signed-rank test) using the SPSS software version 23.0. Results: The present study showed that almost 30% of patients were noncompliant with their drug regime (mean ± standard deviation, 4.23 ± 1.57), and a majority (63.33%) of them presented with a low level of self-esteem. Furthermore, 71.7% and 13.3% of caregivers experienced a moderate and severe burden. An increase in drug compliance (35%) and self-esteem (31%) and a decrease in caregivers’ burden (13%) were observed after the administration of family psychoeducation ( P = 0.00). Conclusion: There is a great need to provide family psychoeducation on a routine basis in general hospitals. Patients with higher self-esteem will ultimately show improved social and occupational functionality resulting in satisfactory treatment compliance and decreased caregivers’ burden.