Many investigators have hypothesized that brain response to cortisol is altered in depression. However, neural activation in response to exogenously manipulated cortisol elevations has not yet been directly examined in depressed humans. Animal research shows that glucocorticoids have robust effects on hippocampal function, and can either enhance or suppress neuroplastic events in the hippocampus depending on a number of factors. We hypothesized that depressed individuals would show 1) altered hippocampal response to exogenous administration of cortisol, and 2) altered effects of cortisol on learning. In a repeated-measures design, 19 unmedicated depressed and 41 healthy individuals completed two fMRI scans. Fifteen mg oral hydrocortisone (i.e., cortisol) or placebo (order randomized and double-blind) was administered 1 h prior to encoding of emotional and neutral words during fMRI scans. Data analysis examined the effects of cortisol administration on 1) brain activation during encoding, and 2) subsequent free recall for words. Cortisol affected subsequent recall performance in depressed but not healthy individuals. We found alterations in hippocampal response to cortisol in depressed women, but not in depressed men (who showed altered response to cortisol in other regions, including subgenual prefrontal cortex). In both depressed men and women, cortisol's effects on hippocampal function were positively correlated with its effects on recall performance assessed days later. Our data provide evidence that in depressed compared to healthy women, cortisol's effects on hippocampal function are altered. Our data also show that in both depressed men and women, cortisol's effects on emotional memory formation and hippocampal function are related.

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