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OBJECTIVE: Telepsychiatry is an increasingly common method of providing psychiatric care, but randomized trials of telepsychiatric treatment compared to in-person treatment have not been done. The primary objective of this study was to compare treatment outcomes of patients with depressive disorders treated remotely by means of telepsychiatry to outcomes of depressed patients treated in person. Secondary objectives were to determine if patients’ rates of adherence to and satisfaction with treatment were as high with telepsychiatric as with in-person treatment and to compare costs of telepsychiatric treatment to costs of in-person treatment. METHOD: In this randomized, controlled trial, 119 depressed veterans referred for outpatient treatment were randomly assigned to either remote treatment by means of telepsychiatry or in-person treatment. Psychiatric treatment lasted 6 months and consisted of psychotropic medication, psychoeducation, and brief supportive counseling. Patients’ treatment outcomes, satisfaction, and adherence and the costs of treatment were compared between the two conditions. RESULTS: Hamilton Depression Rating Scale and Beck Depression Inventory scores improved over the treatment period and did not differ between treatment groups. The two groups were equally adherent to appointments and medication treatment. No between-group differences in dropout rates or patients’ ratings of satisfaction with treatment were found. Telepsychiatry was more expensive per treatment session, but this difference disappeared if the costs of psychiatrists’ travel to remote clinics more than 22 miles away from the medical center were considered. Telepsychiatry did not increase the overall health care resource consumption of the patients during the study period. CONCLUSIONS: Remote treatment of depression by means of telepsychiatry and in-person treatment of depression have comparable outcomes and equivalent levels of patient adherence, patient satisfaction, and health care cost.