Evidence is presented to support the validity of recurrent psychotic (or delusional) unipolar depression as a distinct clinical subtype. A combination of antipsychotic and antidepressant medication was effective during hospitalization for 10 of 12 patients so diagnosed, and as prophylaxis in outpatient follow-up for 7 of the 12. Three patients who discontinued their medication decompensated and were rehospitalized. Patients with this disorder are often misdiagnosed as having a schizophrenic or schizoaffective disorder and therefore do not receive the most appropriate chemotherapy. The dexamethasone suppression test can help to confirm the diagnosis in many of these patients and provide a laboratory correlate for clinical improvement.