The group held its inaugural gathering yesterday at the St Clair Hot Salt Water Pool to coincide with Orientation Week.
About 60 people attended a Pilates session at the pool, followed by a swim and barbecue.
They were encouraged to wear fluoro colours to highlight mental illness and encourage awareness.
Organiser and co-ordinator Hamish Hull, a fifth-year science and commerce student at the University of Otago, said it was about connecting students, especially those from out of town, with the community.
He had been involved in a similar group in Mt Maunganui.
"The whole idea of it is to de-stigmatise mental illness and normalise it,'' Mr Hull said.
"We've bought in organisations from the community so they know there are people there if they are going through a funk. A lot of [students] come from out of town and we want to make it feel like it's their home and that they are more than just a visitor.''
Mental illness could be defined as anything from feeling a bit down during exams to depression or bipolar disorder, Mr Hull said.
"The idea of the fluoro is to make the unseen, seen.''
Social psychology post-graduate student Marea Colombo (24) said the group was a great idea.
"It's good to challenge it before it becomes a real problem.''
The Dunedin City Council, the university, Life Matters and the Cancer Society supported the group, which would hold fortnightly gatherings at the St Clair pool.