The theory of social representations has been applied in empirical research that examines shared understandings of mental illness in different communities. Another line of inquiry, drawing on a number of theoretical perspectives, has dealt with the functions of diagnosis in everyday sense-making regarding mental problems. This paper suggest how the theoretical model of social representation can be extended in order to account for representation as interactive sense-making in which diagnostic concepts serve as a mediating resource. An empirical study of discourse in self-help groups with people sharing experiences of mental health problems is used to explore the role of diagnosis in establishing shared understandings and identity. It is argued that when diagnoses are anchored in lay knowledge, they acquire new meaning potentials and serve new functions for representation that have ontological, epistemological, and moral dimensions.