The central nervous system side effects associated with interferon-alpha (IFN-alpha) therapy, including depression and cognitive changes, can compromise otherwise effective immunotherapy. The term "depression" has multiple meanings ranging from a feeling of sadness to a neuropsychiatric disorder with defined diagnostic criteria. A syndrome of mood disturbance with memory impairment, cognitive slowing, and impaired executive function is common with IFN-alpha therapy and is consistent with mild subcortical dementia. Cognitive deficits and mood disorder may occur independently, and in some cases depression is a reactive phenomenon. Risk factors for development of IFN-alpha neurotoxicity include duration of treatment, high-dose therapy, and prior cranial irradiation or neurologic illness. Past or current psychiatric illness also may put the patient at risk. Subtypes of major depression are associated with neuroendocrine and neurochemical alterations that are consistent with the observed activities of IFN-alpha. This may provide insight into the etiology of IFN-alpha neurotoxicity, as well as possible interventions. Assessment of the neuropsychiatric status of patients treated with IFN-alpha should be a standard of care. Possible pharmacologic interventions to decrease the neurotoxicity associated with IFN-alpha therapy include antidepressants, psychostimulants, and opioid antagonists. Preliminary clinical and research experience suggests that it is possible to effectively palliate IFN-alpha toxicity.