While atypical antipsychotics appear to be effective in reducing depressive symptoms in the acute phase of schizophrenia, little is known about their efficacy in patients with ongoing symptoms. The present study assessed whether quetiapine (Seroquel) is more effective than haloperidol in treating depressive symptoms in patients with persistent positive symptoms, and investigated whether this effect is independent, or secondary to, reductions in other symptoms such as positive, negative or extrapyramidal symptoms. Patients with schizophrenia and a history of partial refractoriness to conventional antipsychotics who had not responded to 4 weeks of fluphenazine treatment (20 mg/day) were randomized to receive either quetiapine (600 mg/day) or haloperidol (20 mg/day) for a further 8 weeks. Change in the Positive and Negative Syndrome Scale depression factor score from baseline to endpoint was calculated and path analyses were performed on data from 269 patients. Quetiapine produced a greater reduction in depressive scores than haloperidol (-1.60 versus -0.54; p = 0.006). The path analyses indicated that this was a direct effect on depressive symptoms. These findings extend the evidence for an antidepressant effect for the novel antipsychotics in schizophrenia, and suggest that this is not limited to acutely psychotic patients.