Background Substantial mental health disparities between lesbian, gay and bisexual (LGB) individuals compared with heterosexuals have been identified. The aim was to examine potential sexual orientation-based disparities in mental health treatment in a prospectively analysed population-based sample in Sweden and to explore potential moderators and mediators. Method 30 730 individuals from the Stockholm Public Health Cohort were followed up with questionnaires and registry-based health record data on psychiatric healthcare visits and prescription drug use between 1 January 2011 and 31 December 2011. Results In adjusted analyses, gay and lesbian individuals were more likely to receive treatment for anxiety disorders (adjusted ORs (AOR) = 3.80; 95% CI 2.54 to 5.69) and to use antidepressant medication (AOR= 2.13; 95% CI 1.62 to 2.79); and bisexuals were more likely to receive treatment for mood disorders (AOR = 1.58; 95% CI 1.00 to 2.48), anxiety disorders (AOR = 3.23; 95% CI 2.22 to 4.72) and substance use disorders (AOR = 1.91; 95% CI 1.12 to 3.25), and to use antidepressant medication (AOR = 1.91; 95% CI 1.12 to 3.25) when compared with heterosexuals. The largest mental health treatment disparities based on sexual orientation were found among bisexual women, gay men and younger lesbian women. More frequent experiences of victimisation/threat of violence and lack of social support could partially explain these disparities. Conclusions This study shows a substantially elevated risk of poor mental health among LGB individuals as compared with heterosexuals. Findings support several factors outlined in the minority stress theory in explaining the mechanisms behind these disparities.