Without question, cognitive behavioral therapy (CBT) is the most studied non-pharmacological intervention for the treatment of depression in youth, with over 80% of published psychotherapy trials testing the effects of CBT protocols. Until quite recently, CBT also was widely proclaimed to be a highly effective intervention for youth depression, albeit with stronger data for adolescent than for child samples. However, within the past two years, a series of new findings have complicated this previously rosy picture of CBT. The most well-known results come from the Treatment of Adolescents with Depression Study (TADS, 2004). In the TADS investigation, CBT failed to outperform a pill placebo, while active medication treatments (fluoxetine alone and fluoxetine-plus-CBT) produced strong and consistent effects. In this article, the authors strive to make sense of these seemingly conflicting findings, provide direction for the appropriate use of CBT in practice given the current evidence base, and suggest areas of additional investigation that may help to clarify the current confusion on the effects of CBT.