Although dysthymia, a chronic, low-grade form of depression, has a morbidity rate as high as that of major depression, and increases the risk for major depressive disorder, limited information is available concerning the etiology of this illness. In the present report we review literature concerning the biological and characterological features of dysthymia, the effectiveness of antidepressant treatments, the influence of stressors in the precipitation and maintenance of the disorder, and both quality of life and psychosocial correlates of the illness. We also provisionally suggest that dysthymia may stem from disturbances of neuroendocrine and neurotransmitter functioning (eg, corticotropin releasing hormone and arginine vasopressin within the hypothalamus, or alternatively monoamine variations within several extrahypothalamic sites), and may also involve cytokine activation. The central disturbances may reflect phenotypic variations of neuroendocrine processes or sensitization of such mechanisms. It is suggested that chronic stressor experiences or stressors encountered early in life lead to the phenotypic neurochemical alterations, which then favor the development of the dysthymic state. Owing to the persistence of the neurochemical disturbances, vulnerability to double depression is increased, and in this instance treatment with antidepressants may attenuate the symptoms of major depression but not those of the basal dysthymic state. Moreover, the residual features of depression following treatment may be indicative of underlying neurochemical disturbances, and may also serve to increase the probability of illness recurrence or relapse. Molecular Psychiatry (2000) 5, 242-261.