Disability in life functioning is an important and poorly understood consequence of major depressive disorder (MDD). Mood symptoms do not account for the magnitude of disability resulting from MDD. Impairments in several domains of neurocognitive (NC) functioning have been shown to interfere with functionality in other psychiatric populations. These deficits, also present in MDD, may play a significant role in disability experienced by many with this disorder. The aim of this study was to examine the degree to which NC deficits, independent of affective and psychotic symptoms, explain functional outcome 6 months following hospitalization for a major depressive episode. Participants with an MDD diagnosis (N=48) received NC testing and symptom ratings while in the hospital. These procedures were repeated, along with functionality ratings, 6 months later. Six-month NC performance was strongly associated with functionality ratings after covariation for residual depression. Selected NC domains tested at baseline were predictive of functionality at 6 months. These data indicate that NC deficits, at least for some MDD sufferers, play an important role in functional recovery. New treatments, whether pharmacologic or rehabilitative, may be required to help affected patients accommodate neurocognitively based performance deficits at work, at home and in the community.