Current treatments for depression are inadequate for many individuals, and progress in understanding the neurobiology of depression is slow. Several promising hypotheses of depression and antidepressant action have been formulated recently. These hypotheses are based largely on dysregulation of the hypothalamic-pituitary-adrenal axis and hippocampus and implicate corticotropin-releasing factor, glucocorticoids, brain-derived neurotrophic factor, and CREB. Recent work has looked beyond hippocampus to other brain areas that are also likely involved. For example, nucleus accumbens, amygdala, and certain hypothalamic nuclei are critical in regulating motivation, eating, sleeping, energy level, circadian rhythm, and responses to rewarding and aversive stimuli, which are all abnormal in depressed patients. A neurobiologic understanding of depression also requires identification of the genes that make individuals vulnerable or resistant to the syndrome. These advances will fundamentally improve the treatment and prevention of depression.