In severely depressed patients, emotional arousal, cognitive abnormality and vulnerability to psychotic episodes are linked to a hyperactive hypothalamic-pituitary-adrenal (HPA) axis and high levels of circulating cortisol. The susceptibility pathways underlying these disturbed brain functions are influenced by genetic factors, early-life priming experiences and later-life events. Cortisol is an important determinant in this so-called three hit model. The action of cortisol is protective, but can become harmful if exposure of susceptibility pathways to the stress hormone is excessive and sustained or inadequate. In this article we argue that this change in role of cortisol from protective into harmful depends on the functioning of the mineralocorticoid and glucocorticoid receptors and the context in which the organism experiences the stressor. Actions mediated by the mineralocorticoid and glucocorticoid receptors are complementary and operate in different time domains of the stress response: the mineralocorticoid receptor normally prevents stress-induced disturbances, but if such disturbances occur the glucocorticoid receptor helps the recovery process. An imbalance in these receptor-mediated actions is thought to increase vulnerability to stress-related psychiatric disorders in predisposed individuals. Correction of the imbalance between the mineralocorticoid receptor and the glucocorticoid receptor can, therefore, facilitate recovery processes still present in the diseased brain, provided that the right psychological context is offered to the individual.