The 2-year course, first onset (incidence), recurrence, and recovery of major depression in 174 offspring at high and low risk for major depression were studied. A variety of predictors of course were examined, including parental diagnosis, demographic and clinical characteristics of the family and offspring, comorbidity and social functioning in offspring, and family risk factors. The 2-year incidence rate was 8.5%. All of the incident cases of major depression occurred in offspring of depressed parents. Additional predictors of incidence were a preceding diagnosis of conduct disorder and subclinical symptoms of depression. The recurrence rate results are tentative because of the small sample. The 2-year recurrence rate was 16.1%. Predictors of recurrence were a previous comorbid diagnosis of dysthymia or problems in social functioning. By the end of 2 years, the majority of offspring (87%) had recovered. The mean number of weeks to recovery was 54 in the offspring of depressed parents and 23 in the offspring of nondepressed parents. Offspring with an onset of major depression at age 13 years or younger, who were exposed to divorce in the family or who had been exposed to more than one parental depressive episode, had significantly more protracted times to recovery. We conclude that there are different predictors of incidence of major depression, its recurrence, and time to recovery in offspring, and that parental depression has an impact on the course in offspring.