Patients with chronic medical illness have a high prevalence of major depressive illness. Major depression may decrease the ability to habituate to the aversive symptoms of chronic medical illness, such as pain. The progressive decrements in function associated with many chronic medical illnesses may cause depression, and depression is associated with additive functional impairment. Depression is also associated with an approximately 50% increase in medical costs of chronic medical illness, even after controlling for severity of physical illness. Increasing evidence suggests that both depressive symptoms and major depression may be associated with increased morbidity and mortality from such illnesses as diabetes and heart disease. The adverse effect of major depression on health habits, such as smoking, diet, over-eating, and sedentary lifestyle, its maladaptive effect on adherence to medical regimens, as well as direct adverse physiologic effects (i.e., decreased heart rate variability, increased adhesiveness of platelets) may explain this association with increased morbidity and mortality.