The recognition of depression by nonpsychiatric physicians was studied in a group of patients with diabetes mellitus. One hundred fourteen patients participating in a longitudinal study of diabetes control and complications also agreed to undergo psychiatric evaluation. Twenty-eight (24.6%) of these patients satisfied the Diagnostic and Statistical Manual of Mental Disorders (ed 3) (DSM-III) criteria for major depressive episode. Outpatient and inpatient medical records of these patients were examined and compared to those from a control group of 28 patients without psychiatric diagnosis (psychiatrically well). Physicians recorded the presence of abnormal psychological features (e.g., anxious or depressed mood) in 19 (68%) of the depressed patients and in 1 (3.4%) of the controls (χ2 = 22.5, P < .001). A clinical diagnosis of depression, however, was assigned to only 10 (35.7%) of the depressives and to none (0.0%) of the controls (χ2 = 14.4, P < .001). Fourteen (50%) of the patients with depression were prescribed one or more psychotropic medications (10 were given antidepressants); 3 (10.7%) of the controls were prescribed these drugs (χ2 = 8.4, P < .01). We conclude that diabetologists do correctly identify features of depression in patients with diabetes. However, in only approximately one third of cases is the diagnosis recorded and treatment initiated.