Multiple studies have demonstrated that psychotic major depression (MDpsy) occurs more frequently in bipolar than in unipolar depression. Most MDpsy patients receive acute treatment on inpatient services. Management begins with establishing the diagnosis. DSM-IV recognizes that depression may occur during the prodromal, active, and residual phases of schizophrenia, and limits MDpsy to patients whose episodes of psychosis occur exclusively during episodes of major depressive disorder (MDD). An appropriate goal of acute treatment is to achieve both the remission of major depression and the resolution of delusional ideas. Remarkably little systematic data is available to guide continuation treatment to prevent relapses in the 4-6 months following remission and no studies are available on the prevention of recurrences after 6 months. The outcomes of untreated or inadequately treated MDpsy are poor, with high rates of suicide attempts, recurrences, and residual disability.