The present study set out to examine the relationship between marital status, poverty and depression in a sample of inner-city women. Single and married mothers were followed up over a 2-year period during which time rates of psychosocial risk factors, onset of depression and experience of chronic episodes were measured. Risk of onset was double among single mothers. Single mothers were twice as likely as their married counterparts to be in financial hardship, despite being twice as likely to be in full-time employment. Both of these factors were independently associated with onset in single mothers. The link between them and onset was via their association with humiliating or entrapping severe life events. Single parents were at a much raised risk of experiencing these events. Onset was also more likely to follow such an event when women had poor self-esteem and lack of support, both of which were more common among single mothers. These risk factors were more frequently found among those in financial hardship. Financial hardship was also related to risk of having a chronic episode (lasting at least a year), of which single parents were also at greater risk. The majority of chronic episodes among single mothers had their origins in prior marital difficulties or widowhood and rates of chronicity reduced with length of time spent in single parenthood. Results are discussed in terms of an aetiological model of onset in which financial hardship probably influences outcome at a wide variety of points.