Major depressive disorder (MDD) is characterized by disturbances of mood and affect, but also by a distinct pattern of psychomotor and cognitive deficits such as motor retardation and impaired executive functioning. An important aspect of executive functioning is performance monitoring, i.e., a continuous checking whether intended action goals have been reached and whether correction of the applied strategy is necessary. A well-known marker for action monitoring is the error negativity (Ne) or error-related negativity (ERN), an event-related potential (ERP) component generated in the anterior cingulate cortex (ACC) following erroneous responses. To date, Ne/ERN amplitudes have been investigated in moderately depressed patients only. The present study is the first to investigate action monitoring in severely depressed patients (mean Hamilton score=28.4). In addition, the patients' psychomotor performance was assessed to see whether there is a relationship between action monitoring and psychomotor retardation. Behavioural and ERP measurements were obtained during performance on a speeded two-choice reaction task in 26 patients with MDD and 25 healthy, matched controls. Psychomotor performance measures were speed of simple movements in various psychomotor tasks and the score on the Salpêtrière retardation rating scale (SRRS). Relative to the controls, the patients' behavioural results revealed a similar, but slower performance pattern. Overall between-group differences were demonstrated for the error positivity (Pe) amplitudes, but not for the Ne/ERN amplitudes. However, correlations of the Ne/ERN amplitude with several psychomotor variables were strong. In the depressed patients taking benzodiazepines an additional attenuation of Ne/ERN amplitudes was observed. Only severely depressed patients manifesting retardation showed impeded action monitoring. The correlations between action monitoring and psychomotor performance indicate that in MDD these two processes are highly interdependent, both being deregulated. Moreover, the same network of brain regions is likely to be implicated in both processes.