Major Depressive Disorder is present in 15% to 20% of patients with diabetes. The course of the illness is generally chronic; even after successful treatment depression will reoccur in as many as 80% of diabetic patients. Known to impair overall functioning and quality of life, depression has additional importance in diabetes because of its association with poor compliance with diabetes treatment, poor glycemic control, and an increased risk for micro- and macrovascular disease complications. Despite its relevance to the course of diabetes, depression is recognized and treated in approximately one third of cases. Criteria-based diagnostic systems (eg, DSM-IV) are sensitive and valid methods for detecting depression in diabetes even though unstable diabetes may produce some symptoms of depression. Brief paper-and-pencil tests like the Beck Depression Inventory can be used effectively in outpatient medical settings to screen for depression and help focus the health care team on patients in need of treatment. Data regarding the treatment of depression in diabetes are scant but promising and suggest that treatment is effective and has important positive effects on mood, glycemic control, and overall quality of life.