Depression is prevalent as a co-morbid condition in diabetes. The efficacy of depression treatment with either pharmacological agents or psychotherapy has been demonstrated in the few available controlled trials. Depression has been associated with poor glycemic control and with accelerated rates of coronary heart disease in diabetic patients. Reported depression treatment trials demonstrate benefits of depression remission on glycemic control as well as mood and the potential for improvement in the course and outcome of diabetes. Because adverse effects of pharmacological agents on glycemic control have been observed, optimal therapies that improve both depression and measures of diabetes are still being sought. This review critically examines the efficacy of depression treatment in diabetic patients, the effects of depression treatment on the medical condition, and methodological issues important in the performance of treatment trials in this patient population.