Several clinical and physiologic associations between depression and diabetes mellitus have been reported. In this study, a potential neuroendocrine association was studied by measuring hypothalamic-pituitary-adrenocortical (HPA) axis activity in patients with diabetes mellitus. Plasma cortisol levels and response to dexamethasone administration were determined in 54 diabetics. Twenty-three (55%) of forty-two 1-mg dexamethasone suppression tests (DSTs) performed in 34 subjects, with eight repeated tests, and two (10%) of twenty 2-mg DSTs demonstrated a blunting of normal suppression. None of a variety of potential demographic, physiologic, or mood factors predicted nonsuppression. This study replicates prior findings that HPA dysfunction occurs in association with diabetes, and invalidates the use of the 1-mg DST as a diagnostic marker for melancholia in patients with diabetes.