Depression in diabetes is a prevalent and chronic condition. The etiology is unknown but is probably complex; and biological, genetic, and psychological factors remain as potential contributors. Several neuroendocrine and neurotransmitter abnormalities common to both depression and diabetes have been identified, adding to etiological speculations. Pharmacotherapy of depression may improve both mood and glucose regulation in diabetes, although controlled studies of the efficacy of psychotherapy and pharmacotherapy for depression in diabetes are not yet available. Depression has potential interactions with diabetes on multiple levels and remains an important clinical focus independent of the medical disease.