Research has documented that depressive disorders are a highly prevalent condition among adults in general population and patient samples and that these disorders are strongly associated with functional limitations. But data have not been available to compare the societal importance of depression to other major health conditions. In addition, although about one-half of persons with psychiatric disorders are believed to have their only contact with health care providers in the primary care sector, research findings suggest that depression often remains undetected and untreated in this secto; and there have been few data on how appropriateness of care for depression differs for patients in different health care delivery systems, or whose care is financed by prepayment or fee-for-service arrangements. As a result, it is not clear which health care systems should be promoted as providing appropriate care for this important psychiatric disorder. Data from the Medical Outcomes Study corroborate and strengthen the conclusion that depression is of considerable clinical and social importance in both outpatient medical and mental health specialty care sectors. Specifically, we have learned that depression is associated with as much limitation in multiple aspects of daily functioning and well-being as are most common chronic medical conditions. In addition, we have found that rates of detection of depressive disorder in the primary care sector are low and influenced by nonclinical factors such as type of payment for services. These findings increase the urgency of improving care for depression in the primary care sector, and of carefully evaluating how changes in the financing and organization of health care delivery systems affect the clinical care of psychiatric disorders.