To review data supporting or not supporting the designation of unipolar psychotic major depression as a distinct syndrome in DSM-IV, the authors used computerized literature searches to identify reports of studies that have directly compared the characteristics, biology, familial transmission, course/outcome, and response to treatment of psychotic and nonpsychotic major depression. The review showed that statistically significant differences between the two types of depression have been found on each of these dimensions. There are greater guilt feelings and psychomotor disturbance, among other features, in psychotic depression. Studies have found significant differences between patients with psychotic and nonpsychotic depression in glucocorticoid activity, dopamine beta-hydroxylase activity, levels of dopamine and serotonin metabolites, sleep measures, and ventricle-to- brain ratios. Family studies show higher rates of bipolar disorder in first-degree relatives of probands with psychotic major depression than of probands with nonpsychotic major depression. Greater morbidity and residual impairment have also been reported in patients with psychotic major depression, and they respond more poorly to placebo and to tricyclic antidepressants. Differences between patients with psychotic and nonpsychotic major depression on many of these measures were not due to differences in severity or endogenicity. Since the data indicate that psychotic and nonpsychotic major depression can be separated, the frequency with which the diagnosis of psychotic major depression is missed and its unique course and response to treatment point to the practical importance of a separate diagnosis for this disorder. However, further studies are needed to resolve important methodological issues and to develop an optimal set of operational criteria.Abstract Teaser