Objectives: To determine the safety and acceptability of the TrueBlue model of nurse-managed care in the primary healthcare setting. Design: A mixed methods study involving clinical record audit, focus groups and nurse interviews as a companion study investigating the processes used in the TrueBlue randomised trial. Setting: Australian general practices involved in the TrueBlue trial. Participants: Five practice nurses and five general practitioners (GPs) who had experienced nurse-managed care planning following the TrueBlue model of collaborative care. Intervention: The practice nurse acted as case manager, providing screening and protocol-management of depression and diabetes, coronary heart disease or both. Primary outcome measures: Proportion of patients provided with stepped care when needed, identification and response to suicide risk and acceptability of the model to practice nurses and GPs. Results: Almost half the patients received stepped care when indicated. All patients who indicated suicidal ideations were identified and action taken. Practice nurses and GPs acknowledged the advantages of the TrueBlue care-plan template and protocol-driven care, and the importance of peer support for the nurse in their enhanced role. Conclusions: Practice nurses were able to identify, assess and manage mental-health risk in patients with diabetes or heart disease.