The treatment of severe depression with psychotherapy, alone, is controversial. In this paper, we review the historical, conceptual, and empirical contexts of this controversy. In addition to work by others, we review recent work from our institute which has examined the psychobiological substrates of response to treatment in depressive subtypes. We examine the traditional categories that describe severe depressions. The features and psychobiological correlates of melancholia are discussed, as is the relationship between melancholia and aging. Research on treatment of melancholia and other severe depressive states with psychotherapies such as cognitive behavior therapy (CBT) and interpersonal psychotherapy (IPT) is reviewed in detail. We conclude that although some melancholic patients are responsive to IPT or CBT, there is not yet compelling evidence that melancholic patients respond to psychotherapy as well as they do to medications. The potentially mediating effects of hypercortisolism, alterations of sleep neurophysiology, and disturbances of information processing and regional cerebral metabolism represent fertile grounds for future investigation. We discuss the practical implications of the literature reviewed.