The longitudinal associations between academic competence-building and depression symptoms were investigated among 741 early adolescents in Singapore. Extending from past studies on academic achievement and depression, the current research tested two competing hypotheses – the academic incompetence hypothesis versus the adjustment erosion hypothesis using a 3-wave longitudinal study over an academic year. The former hypothesis suggests that prior deficits in academic competence-building lead to subsequent depression symptoms, whereas the latter posits that previous depression leads to subsequent deficits in competence-building. Longitudinal associations between a higher-order competence-building factor (operationalized using multiple constituent motivational variables) and depression were examined using a random intercept cross-lagged panel model. Results indicated that within-individual decreases in competence-building prospectively predicted subsequent within-individual increases in depression symptoms, but the opposite effect was not observed. Within-individual fluctuations in competence-building also predicted end-of-year grades and teacher-reported adjustment problems. Overall, the current findings were consistent with the academic incompetence hypothesis, suggesting that interventions aimed at sustaining academic competence-building could offer protection against the worsening of depression. These results clarified the within-individual developmental dynamics between academic competence-building and depression symptoms in adolescents over time.