Depression can be encountered concurrently with chronic medical illnesses. The low mood and its associated symptoms may comprise a reaction to a protracted malady, an independent primary affective disorder, a consequence of characterological vulnerabilities highlighted by the medical illness, a side effect of drugs employed to treat other conditions, or perhaps a direct result of the illness process. As one of the most frequent chronic medical conditions, diabetes mellitus can be expected to be associated with depression in a considerable number of instances. Previous efforts to characterize psychological factors, accompanying diabetes have been marred by methodological problems, especially inadequate measuring devices and unreliable psychiatric diagnostic criteria. While the literature is suggestive, firm conclusions cannot be drawn. A systematic description of the relationship between depression and diabetes, detailing incidence and prevalence of depression in diabetics, the effect of depression on blood glucose control, the applicability of standard diagnostic criteria for identifying depression in diabetics, and the fit of theoretical models of depression to such a population, is not available. The authors focus on controlled studies which examine psychological variables relevant to depression in diabetics. The use of clearly delineated diagnostic criteria, instruments, and research subjects is advocated. Suggestions are made for designing studies within the framework of theoretical models of depression.