Until recently, the negative effect that major depressive disorder (MDD) has on interpersonal and workplace functioning had not been widely studied. Traditionally, the goals for treating MDD have also not focused on the commonly associated increases in healthcare utilization for somatic symptoms (ie, headache, abdominal pain) and poorly controlled comorbid medical illnesses, which lead to higher healthcare costs. This article reviews the extensive data collected during the past 10 years that have quantified the impact that MDD has on these outcomes, suggesting that patients with MDD have significant decrements in function, particularly those with comorbid general medical conditions. Also reviewed is the literature presenting evidence from randomized trials of systematic and collaborative treatment efforts that optimize treatment response and, in turn, decrease interpersonal disability, long-term healthcare costs, and the costs associated with lost productivity and absenteeism in the workplace. Such treatment models include algorithmically derived treatment alternatives and collaborative care models, which use a team approach to ensure treatment adherence and to monitor symptom response and side effects. The benefits of using disability assessment measures in conjunction with routine monitoring of depressive symptoms are also discussed.