The presence of delusions or hallucinations in major depressive disorder indicates a severe form of that disorder. Compared with patients with nonpsychotic depression, those with psychotic depression have depressive symptoms that are individually more severe. They also are more likely to have hypothalamic-pituitary-adrenal axis hyperactivity and increased ventricular-to-brain ratios. The short- and long-term outcomes for such patients are poor. Findings that this prognostic disadvantage may be permanent and that psychotic features recur at high rates in subsequent episodes indicate that these symptoms in major depressive disorder have a lifelong significance. Although monotherapy with antidepressants may be effective, recovery is more rapid when antidepressants are combined with antipsychotics. Electroconvulsive therapy is particularly effective for psychotic depression. The importance of combination therapy for prophylaxis is unknown.