For almost a century, the American Psychiatric Association has improved psychiatric practice via its diagnostic manual series. However, the increasing number of diagnoses has created predicaments for clinicians and society. This report suggests explanations for this "inflation" and, using systematics, proposes the following five linked strategies for improving our diagnostic schema. First, criteria based on purposes underlying diagnosis should form the basis for including and excluding psychiatric diagnoses. Second, the major categories (or classes) should be reduced from 17 to one half to one third that number. Third, many psychiatric diagnoses should be removed from their current status as independent diagnoses (or subclasses) and relegated to a more specific taxonomic stratum (e.g., infraclass). Fourth, promising information for new or modified taxons would compose a fourth stratum (or parvclass). Fifth, comorbidity would become a more useful concept if defined as major, intermediate, and minor comorbidity, occurring at class, subclass, and infraclass levels.