Psychological distress often causes suffering in terminally ill patients and their families and poses challenges in diagnosis and treatment. Increased attention to diagnosis and treatment of depression can improve the coping mechanisms of patients and families. This paper reviews the clinical characteristics of normal grief and clinical depression and explains strategies for differential diagnosis. Although some literature discusses the psychological issues facing elderly patients and terminally ill patients with cancer, less is known about patients with end-stage pulmonary, cardiac, renal, and neurologic disease. Data on the effectiveness of interventions in terminally ill patients are lacking. Treatment recommendations in this paper represent extrapolations from existing literature and expert opinion. Diagnosing and treating depression in terminally ill patients involve unique challenges. Evidence of hopelessness, helplessness, worthlessness, guilt, and suicidal ideation are better indicators of depression in this context than neurovegetative symptoms. Although terminally ill patients often have suicidal thoughts, they are usually fleeting. Sustained suicidal ideation should prompt a comprehensive evaluation. Clinicians should have a low threshold for treating depression in terminally ill patients. Psychostimulants, because of their rapid onset of action, are useful agents and are generally well tolerated. Selective serotonin reuptake inhibitors and tricyclic antidepressants may also be used. Psychological interventions-including eliciting concerns and conveying the potential for connection, meaning, reconciliation, and closure in the dying process-can also facilitate coping.