This study examines whether a diagnosis of mental impairment of a care recipient influences the strain of family caregiving. Two competing hypotheses, derived from labeling theory, provide alternative views. One posits that a diagnosis reduces strain by linking problematic characteristics of care recipients' impairment to an illness. The competing hypothesis suggests that a diagnosis increases strain by reifying the existence of a progressive chronic condition. LISREL analysis with data from a sample of 576 primary caregivers shows that the diagnosis has an important effect, but this influence varies for different types of strain. Relationship strain and restrictions in social activities are increased for caregivers of diagnosed care recipients. Functional impairment also causes a greater restriction of social activities when a diagnosis has been made. A different pattern emerges for depression, with caregivers in the diagnosed group being less depressed and less negatively affected by care recipients' impaired ability for social interaction, but more depressed by disruptive behavior and functional impairment.