Over the years, theatre has painted various vistas of mental health issues across strata of society. This is usually not given the right publicity, thus blurring the relationship between the theatre and mental health.  Scholars have made persistent attempts at interrogating the link between theatre and mental health. Therefore, this study established the nexus concerning Oyo as a local environment with various issues of mental disorder. The study employed in-depth interviews, observations, and focus group discussions as qualitative methods. Findings revealed that the prevailing type of mental health issues was environmentally inclined. Also, Spiritual affliction was revealed to be the major cause of mental health disorders in Oyo town, with unemployment, low self-esteem, depression and suicide as the consequences. The main therapy used to treat mental health in Oyo town is spiritualism. The use of drama as a healing therapy was made potent through purgation (catharsis), relaxation, and supplication. The use of drama as therapy in Oyo town has been subsumed in some of the spiritual interventions commonly used to treat the mentally retarded. However, a conscious and practical use of drama/performance in the selected mental facilities has shown an ideal level of effectiveness as a healing therapy, which can be further explored for the treatment of mental illness in Oyo town. Drama/performance as therapy, in the form of Theatre for Development (TFD), should be formally introduced into treatment measures in Oyo State.