The proposed research extends previously funded studies on the pathophysiology and treatment of psychotic major depression (PMD), a severe and often debilitating form of depression. Results thus far indicate that PMD patients demonstrate: significantly elevated cortisol activity during the expected quiescent period (1800 - 0400 hrs); impaired performace on tests of attention, executive fucntioning, and verbal and working memory; increased activity of prefrental subgenual cortex on fMRI; smaller hippocampal volumes on structural MRI; and rapid improvement in psychosis with a glucocorticoid receptor antagonist, mifepristone. Based on these results, the proposed studies test the following hypotheses: (1) In PMD patients, the significantly higher cortisol levels observed during the quiescent period are associated with decreased response of mineralocorticoid receptors (MR's) to challenge with a MR agonist; (2) Hippocampal volume is significantly smaller in PMD patients than in NPMDs and HCs. In depressed patients, smaller hippocampi are associated with decreased MR responses on fludrocortisone challenge; (3) 8 days of treatment with 600mg/day of mifepristone results in significantly greater improvement in psychotic symptoms than does placebo and this improvement is maintained for at least an additional 2 weeks; (4) Improvement in psychotic symptoms with mifepristone treatment is associated with acute increases in cortisol and ACTH levels, steepening of both cortisol and ACTH slopes, and changes in MR activity; and (5) In PMD, fMRI prefrontal subgenual cingulate activity at rest is significantly increased compared to NPMDs or controls. Improvement in psychosis with mifepristone is associated with decreases and increases in fMRI activity at rest in the prefrontal subgenual cingulate and hippocampal regions, respectively. The approaches used to address these aims move across various disciplines, with the ultimate goal of understanding why some depressed patients become psychotic or otherwise cognitively impaired, and uncovering new and faster methods of treatment for PMD and stress-related psychiatric disorders. Of particular importance is that the treatment may be effective even when given intermittently.