Interferon (IFN)-alpha, IFN-beta, and IFN-gamma are currently available for the treatment of malignancies, viral infections (e.g., hepatitis C virus), multiple sclerosis (MS), and skin conditions. In addition to their therapeutic effects, IFNs commonly cause various side effects. Most common among the side effects of IFN are "flu-like" symptoms such as chills, fever, and muscle soreness. However, IFN can also cause significant neuropsychiatric side effects, particularly symptoms of depression. A literature search was conducted in order to summarize current information on (1) the frequency, characteristics, and risk factors of IFN-induced depression, (2) possible biochemical mechanisms associated with IFN-induced depression, and (3) the treatment strategies for IFN-induced depression. Review of the literature suggests that symptoms of depression induced by IFN therapy, in particular IFN-alpha therapy, are common and can limit the treatment utility, often necessitating discontinuation of IFN therapy or the use of psychopharmacologic agents. Depression is also a suspected side effect of therapy with IFN-beta and IFN-gamma; however, the association has not been as convincingly confirmed. Importantly, IFNs affect neurochemical pathways putatively involved in the etiology of depression. While these depressive side effects usually resolve after the completion of IFN therapy, they can persist or reappear with dose escalations. It is recommended that health care providers, patients and their families be informed about the potential risk of the psychiatric disturbances that can occur with IFN-alpha therapy. Screening and monitoring, ideally using symptom rating scales for depression, and early antidepressant treatment intervention appear necessary to optimize IFN therapy for the majority of patients.