Recovery and personalisation have both emerged independently and are prominent in the Government's mental health strategy. In similar ways, both challenge the current predominance of professional, clinical knowledge over the expertise of lived experience in the mental health system and require significant changes in the culture, practice and organisation of mental health services. This paper aims to explore the links between recovery and personalisation and to demonstrate how both are part of a common agenda for mental health system transformation. While personalisation is a more recent concept, it builds on approaches that are already underway as part of recovery-oriented practice. The first part of this paper describes personalisation, personal budgets and personal health budgets. The second sets out their shared philosophy and discusses what the two approaches mean for changing the current service system. The third focuses on personal health budgets as tools for recovery and identifies the eight core features that need to be put in place if recovery-oriented services are to maximise the potential of personal health budgets. Recovery, personalisation and personal budgets is the second of a series of briefing papers from ImROC.