Background: Involvement of service-users at all levels of the mental health system is a policy imperative in many countries internationally. However, putting policy into practice seems complex; little is known about how best to involve service users and efforts are often criticized for being tokenistic. In low-and-middle income countries, less attention has been given to the roles of service users within mental health systems. The proposed study is part of a larger project intended to develop service-user involvement in mental health system strengthening in Ethiopia. A Theory of Change (ToC) model has already been developed through a participatory approach. This study protocol aims to describe the theoretical background and methods to pilot this model using participatory action research (PAR) and explore participants' experience of involvement. Methods: The proposed study will apply a PAR approach situated in critical social theory and conduct a phenomenological case study to find out participants' experience of involvement. This will be conducted in three stages. The focus of Stage 1 will be to(i) establish a Research Advisory Group (RAG), and Research Participant Group (RPG) at district and primary healthcare facility levels, respectively, and (ii) identify and prioritize potential areas of concern for involvement in the domains of advocacy, service planning and development, monitoring and improving service quality. In Stage 2, we will work with the RPG to develop a plan of action for the selected area. Stage 3 will aim to assist the RPG to implement and evaluate the plan of action. Process indicators and observation will be combined with in-depth interviews with participants to elicit their experiences of involvement. Thematic content analysis will be used. Discussion: The participatory approach to mental health service user involvement in health system strengthening employed by this study will support the implementation of solutions through locally relevant and contextualized actions. Findings from this study will contribute to the body of knowledge towards understanding the complexity of implementation of service user involvement and refine the ToC model for transferability to similar settings.