Objective This paper updates clinicians and service leaders on evidence bases relevant to rehabilitation for older Australians with mental illness. Methods Narrative review of literature and relevant public domain data supported by reflections on NSW service development. Results There is a paucity of high-quality evidence regarding mental health rehabilitation in older people. Available evidence supports integrating lessons from physical healthcare with adaptations of ‘adult’ mental health rehabilitation. Adaptation is required to respond to the specific needs, strengths and service use of older people with mental illness. Challenges for older people include ageism, increased physical and cognitive comorbidities, lower access to mental health services and earlier residential aged care entry. Strengths of older people include an ongoing desire for recovery, ongoing developmental change and often closer connections with carers and GPs. Evidence is consistent with evaluation of relevant NSW service models and initiatives including the Pathways to Community Living Initiative. Integration of recovery-oriented practice and wellness models may provide a framework for future innovative inpatient and community-based models. Conclusions There is sufficient evidence to guide development of models of rehabilitation with older people, but innovation and evaluation are essential if older people are to have equal opportunities in their recovery journeys.