We study the effective potential for composite operators. Introducing a source coupled to the composite operator, we define the effective potential by a Legendre transformation. We find that in three or fewer dimensions, one can use the conventionally defined renormalized operator to couple to the source. However, in four dimensions, the effective potential for the conventional renormalized composite operator is divergent. We overcome this difficulty by adding additional counterterms to the operator and adjusting these order by order in perturbation theory. These counterterms are found to be non-polynomial. We find that, because of the extra counterterms, the composite effective potential is gauge dependent. We display this gauge-dependence explicitly at two-loop order.

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