Dysthymic disorder (DD) is a chronic subsyndromal depressive condition that has generated increasing interest since its formal introduction into the psychiatric nomenclature in 1980. Although DD was included among the affective disorders in DSM-III, this classification was controversial. Some clinical and family studies support an association between DD and major depression disorder (MDD), but there has been little additional research firmly establishing the diagnostic validity of DD or clarifying its relation to MDD and to personality disorders. In this article, the literature on the biology of DD is reviewed. Studies of rapid eye movement (REM) latency, electrodermal activity, and the thyroid axis show similarities between DD and MDD, but the findings are mixed. Other investigations, including the Dexamethasone Suppression Test (DST), catecholamines, and several other electroencephalogram (EEG) sleep variables, show more consistent differences between DD and MDD. These findings suggest that DD manifests primarily trait characteristics of depression, thus differentiating it from the state characteristics of MDD. The methodological problems and implications of these studies, and suggestions for future research, are discussed.