Chronic insomnia is a risk factor for the development of psychiatric disorders, including depression, as well as a prodrome of major depressive episodes, a consequence or complication of depression that often persists beyond the clinical episode, and a prognostic indicator of long-term illness course and treatment response. In addition, sleep is physiologically abnormal in persons at risk for depression; for example, shortened REM sleep latency is present not only during clinical episodes of depression, but also before the clinical episode in subjects at risk for depressive illness. Although insomnia usually disappears as depression is treated, it may persist, indicating heightened vulnerability to depressive relapse or recurrence. Physiological changes in sleep related to depression correlate with the likelihood of response to psychotherapy alone and may also identify which patients are unlikely to do well with psychosocial treatment and, therefore, to need somatic therapy in order to preserve recovery. Electroencephalographic (EEG) sleep changes also correlate with the speed of response and with the brittleness or durability of response (i.eprobability of relapse or recurrence). These observations suggest a close relationship between the regulation of sleep and the regulation of mood. The importance of this relationship is further underscored by recent brain imaging studies of sleep and sleep deprivation in patients with major depression. For example, therapeutic sleep deprivation (TSD) may serve as both a catalyst of rapid antidepressant activity and as a probe of treatment resistance. TSD's effects on brain metabolic rates, especially in limbic areas, may correlate with a therapeutic response to a night of sleep loss and to antidepressant medication. Finally, treating chronic insomnia with newer selective serotonin reuptake inhibitor (SSRI) antidepressant medication may represent an opportunity for preventing complications of insomnia, including depressive illness.