A report published by the Sainsbury Centre for Mental Health says children should be taught about mental health as part of the school curriculum by 2015.
It urges a shift in focus from mental ill health to mental well-being, with services better geared to users' needs.
The government says improvements have been made already and more will follow.
The report, which the Sainsbury's Centre for Mental Health produced with the Local Government Association (LGA), the NHS Confederation and the Association of Directors of Social Services, said that, over the next decade, mental health should become everybody's business.
The key will be to reshape services to ensure that they are primarily geared towards meeting the needs of the people who use them, it said.
The report calls for people with severe mental health conditions to have their own budgets for the services they want, including alternatives to hospital.
Talking therapies, said the report, should be available as a matter of routine when people need them, along with advice on staying in work and maintaining an ordinary life.
People with mental health problems should also be offered an "associate" to help them manage their lives.
LGA mental health spokesperson David Rogers said up to one in four people would suffer from mental health problems at some point.
Read between the lines here... 1 in 4 people have "mental health problems" - like, stress? Anxiety? Caused by...? A cookie goes to whoever gets it first :P