OBJECTIVE: This study compared the clinical and neuropsychological characteristics of patients with psychotic depression to those of patients with nonpsychotic depression and patients with schizophrenia. METHOD: Two hundred eighteen patients over the age of 45, including 30 who met the DSM-III-R criteria for unipolar major depression with psychotic features, 28 with nonpsychotic unipolar major depression, and 160 with schizophrenia, were examined. Subjects were evaluated on several clinical measures as well as on neuropsychological tests of attention, learning, memory (retention), psychomotor speed, and motor skills. RESULTS: The three groups were comparable in age and education. The severity of depressive symptoms in the depressed patients with and without psychosis was similar. The patients with psychotic depression were comparable to those with schizophrenia on the neuropsychological measures; they were more impaired than the patients with nonpsychotic depression on the measures of psychomotor speed, motor skills, attention, and learning. The cognitive deficits seemed to be trait- related. CONCLUSIONS: The findings provide additional support for the validity of psychotic depression as a diagnostic category distinct from nonpsychotic depression.