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This review examines advances over the last year in the field of prepubertal mood disorders.In bipolar affective disorder, general consensus has been established for a phenotype distinct from but co-morbid with attention deficit hyperactivity disorder. Pharmacological trials have provided some support for the safety and efficacy of combination pharmacotherapies. Debate has continued about the possible roles of selective serotonin reuptake inhibitors and stimulants in ‘switching’ children from an episode of depression to mania. Work on the phenomenology of prepubertal major depressive disorder has identified a preschool phenotype. Double-blind placebo-controlled studies have increased the evidence base for use of fluoxetine in the treatment of major depressive disorder. Few controlled studies have explored the efficacy of psychotherapies. Results from general psychiatry underscore the developmental importance of identification of childhood mood disorders: providing evidence for gene-environment interactions in the pathogenesis of major depressive disorder, suggesting vulnerable periods for environmental insults, and raising the disturbing possibility that untreated major depressive disorder is detrimental to the brain.Despite significant progress there remains a striking paucity of data to direct clinical practice in the treatment of prepubertal mood disorders. Data are badly needed to clarify the risk-benefit ratio in circumstances in which potential side effects are not fully understood and the consequences of not treating may, themselves, be detrimental. Further revisions of the early phenomenology of major depressive disorder and bipolar affective disorder will provide the basis for future treatment trials and further studies of etiology and neurobiology.