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Designing and implementing psychosocial intervention programmes in post conflict settings requires a breadth of knowledge of the context, circumstances, and needs of vulnerable social groups. However, mixed methods research focusing on which groups are vulnerable, and their specific psychosocial needs, is rarely conducted. This study uses historical policy discourse analysis to identify the origins of contemporary social categories related to vulnerability in Nepal, specifically caste. The policy analysis is employed to interpret cross-sectional epidemiological findings from a sample of 316 adults. Analyses test the relationship between caste and psychological morbidity, assessed with the General Health Questionnaire (GHQ-12), including potential mediators. Low caste (Dalit/Nepali) groups were found to have a 53,3 percent prevalence of psychological morbidity compared with 28,2 percent prevalence among other caste and ethnic groups (odds ratio 2,91, 95% confidence interval 1,71–4,96). Income and stressful life events partially mediate the relationship between caste and psychological morbidity. These findings are interpreted in relation to themes from the policy analysis including restrictions in social interactions, access to resources, social control and punishment, social mobility and gender relations. The study concludes with recommendations for addressing the needs of vulnerable social groups in post conflict settings.