This study focuses on the type of elder care arrangements and its consequences for mental health among physically frail elderly. Based on data from 410 frail older people, this study reveals the following results: (1) Frail elderly in family caregiving situation shows better mental health in terms of depression and psychological well-being than those in self-care or public institutional situation, (2) but this positive effect of family caregiving on mental health, especially depression, among older people is partly explained by the differences in income and marital status among older people in different caregiving situations, (3) the factors which are significantly related to mental health of older people are income in family caregiving situation, and education in both self-care situation and institutional situation. The results of the study emphasize the importance of family resources in family caregiving situation and of personal resources in self7are or institutional situation.