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A mind flayer can cast a few spells, requiring no components. There seems to be two parts to this:

  1. If a spell being cast has no components, would others be even aware that it is being cast at all?
  2. Does counterspell work against a psionic spell?
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11
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Counterspell does not work against the mind flayer's spells

To use counterspell you must be aware of a spell being cast. However, Xanathar's Guide to Everything tells us that if a spell has no components it is imperceptible to all observers:

If the need for a spell’s components has been removed by a special ability, such as the sorcerer’s Subtle Spell feature or the Innate Spellcasting trait possessed by many creatures, the casting of the spell is imperceptible.

The mind flayer can cast several spells using Innate Spellcasting (Psionics) which says:

It can innately cast the following spells, requiring no components:

Thus, the mind flayer's spells cannot be perceived. And because of that they cannot be counterspelled.

Jeremy Crawford has confirmed the same ruling for the case in which Subtle Spell is used to remove all components from a spell:

Subtle Spell is meant to protect a spell w/o material components from counterspell, since you can't see the casting.

Innate Spellcasting (Psionics), in general, can be counterspelled

Even though we know it won't work against the mind flayer it is worth looking at what the general rules for Innate Spellcasting (Psionics) are. Here's what the basic rules say about it:

A monster that casts spells using only the power of its mind has the psionics tag added to its Spellcasting or Innate Spellcasting special trait. This tag carries no special rules of its own, but other parts of the game might refer to it. A monster that has this tag typically doesn't require any components to cast its spells.

So, if there is a monster that has Innate Spellcasting(Psionics) and uses it to cast a spell that does have components, it can be counterspelled because spells cast in this manner are just normal spells with no special rules and spells, in general, can be counterspelled.

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-4
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No.

You attempt to interrupt a creature in the process of casting a spell.

Counterspell works against spells. Not spell-like abilities which is what a Mind Flayer uses.

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  • 1
    \$\begingroup\$ Mind Flayers do indeed have innate spellcasting, which involves spells, not "spell-like abilities". Rubiksmoose touches on the real problem with using Counterspell against a Mind Flayer's spells. \$\endgroup\$ – V2Blast May 9 '18 at 2:55
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    \$\begingroup\$ In fact, 5e doesn't even have spell-like abilities. Not by name anyways. \$\endgroup\$ – Rubiksmoose May 9 '18 at 3:01

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