Reviews characteristics that distinguish major depression with psychotic features (PMD) from nonpsychotic major depression, including differences in family history, signs and symptoms, course, treatment response, and biology. Biological differences include elevated glucocorticoid and dopamine (DA) activity. Emphasis is placed on increased activity of the hypothalamic-pituitary-adrenal (HPA) axis and DA activity systems in PMD. Research to date points to a relationship between stimulation of cortisol production and subsequent delayed effects on homovanillic acid. The possible relationship of HPA axis overactivity to induction of DA overactivity is discussed, and the questions of how and where the HPA axis affects DA are addressed. Interactions between the 2 systems are reviewed in terms of the biological basis for psychotic thinking in depressed patients. (PsycINFO Database Record (c) 2009 APA, all rights reserved)