Background Clinically significant depression is present in 25 % of individuals with type 2 diabetes, its risk being doubled in women. Purpose To examine the effectiveness of the Study of Women's Emotions and Evaluation of a Psychoeducational (SWEEP), a group therapy for depression treatment based on cognitive behavioral therapy principles that was developed for women with type 2 diabetes was conducted. Methods Women with significantly elevated depression symptoms (Center for Epidemiologic Studies Depression Scale ≥16) were randomized to SWEEP (n038) or usual care (UC, n036). Results Multilevel modeling indicated that SWEEP was more effective than UC in reducing depression (mean difference of -15 vs. -7, p<.01), decreasing trait anxiety (mean difference of -15 vs. -5, p<.01), and improving anger expression (mean difference of -12 vs. -5, p<.05). Although SWEEP and UC had improvements in fasting glucose (mean difference of -24 vs. -1 mg/dl) and HbA1c (mean difference of -0.4 vs. -0.1 %), there were no statistically significant differences between groups. Conclusions SWEEP was more effective than UC for treating depressed women with type 2 diabetes. Addition of group therapy for depression meaningfully expands the armamentarium of evidence-based treatment options for women with diabetes.