Recently several steroid compounds have been discovered to act as neuromodulators in diverse central nervous system (CNS) functions. We wondered if neuroactive steroids might be involved in affective illness or in the mode of action of mood-regulating medications such as carbamazepine. Levels of the neuroactive steroids pregnenolone and progesterone, as well as the neuropeptide diazepam binding inhibitor (DBI) (known to promote steroidogenesis), were analyzed from cerebrospinal fluid (CSF) obtained by lumbar puncture (LP) from 27 medication-free subjects with affective illness and 10 healthy volunteers. Mood-disordered subjects who were clinically depressed at the time of the LP had lower CSF pregnenolone (n = 9, 0.16 ng/ml) compared with euthymic volunteers (n = 10, 0.35 ng/ml; p < 0.01). In addition, pregnenolone was lower in all affectively ill subjects (n = 26, 0.21 ng/ml), regardless of mood state on the LP day, than healthy volunteers (p < 0.05). No differences were found for progesterone or DBI levels by mood state or diagnosis. Progesterone, pregnenolone, and DBI did not change significantly or consistently in affectively ill subjects after treatment with carbamazepine. CSF pregnenolone is decreased in subjects with affective illness, particularly during episodes of active depression. Further research into the role of neuroactive steroids in mood regulation is warranted.