Child and adolescent major depressive disorder and dysthymic disorder are common, chronic, familial, and recurrent conditions that usually persist into adulthood. These disorders appear to be manifesting at an earlier age in successive cohorts and are usually accompanied by comorbid psychiatric disorders, increased risk for suicide, substance abuse, and behavior problems. In addition, depressed youth frequently have poor psychosocial, academic, and family functioning, which highlights the importance of early identification and prompt treatment. Both psychotherapy and pharmacotherapy have been found to be beneficial for the acute treatment of youth with depressive disorders. Opinions vary regarding which of these treatments should be offered first and whether they should be offered in combination. In general, the choice of initial therapy depends on clinical and psychosocial factors and therapist's expertise. Based on the current literature and clinical experience, psychotherapy may be the first treatment for most depressed youth. However, antidepressants must be considered for those patients with psychosis, bipolar depression, severe depressions, and those who do not respond to an adequate trial of psychotherapy. All patients need continuation therapy and some patients may require maintenance treatment. Further research is needed on the etiology of depression; the efficacy of different types of psychotherapy; the differential effects of psychotherapy, pharmacotherapy, and integrated therapies; the continuation and maintenance treatment phases; treatment for dysthymia, treatment-resistant depression, and other subtypes of major depressive disorder; and preventive strategies for high-risk children and adolescents.