With its naturally fluctuating course, depression is a highly placebo-responsive condition: mean placebo response rates in antidepressant clinical trials are 30% to 40%. We review the history and terminology of placebo and the proposed mechanisms underlying the placebo response, including the physician-patient relationship and biological, sociocultural, and treatment situation factors. We identify the predictors and patterns of placebo response in depressed patients, both within and outside of the clinical trial context, and differentiate between true drug response and placebo pattern response. We discuss the strategies now being advanced to minimize the placebo response given the increased placebo drift reported in recent trials, and the ethical guidelines governing placebo administration. Potential areas for future research include the identification of biological markers of placebo response, such as functional neuroimaging and quantitative electroencephalography, the development and testing of more sophisticated, alternative research designs, and the design of valid biological tools to assess antidepressant efficacy.