BACKGROUND Interpersonal psychotherapy and cognitive-behavioural therapy (CBT) are established as effective treatments for major depression. Controversy remains regarding their effectiveness for severe and melancholic depression. OBJECTIVE To compare the efficacy of interpersonal psychotherapy and CBT in people receiving out-patient treatment for depression and to explore response in severe depression (Montgomery-Asberg Depression Rating Scale (MADRS) score above 30), and in melancholic depression. METHODS Randomised clinical trial of 177 patients with a principal Axis I diagnosis of major depressive disorder receiving 16 weeks of therapy comprising 8-19 sessions. Primary outcome was improvement in MADRS score from baseline to end of treatment. RESULTS There was no difference between the two psychotherapies in the sample as a whole, but CBT was more effective than interpersonal psychotherapy in severe depression, and the response was comparable with that for mild and moder-ate depression. Melancholia did not predict poor response to either psychotherapy. CONCLUSIONS Both therapies are equally effective for depression but CBT may be preferred in severe depression.