This study examined the association between active and past major depression and deficits in young adult functioning using data from a longitudinal community study (N = 354). Three groups were compared: (1) participants with a 1-year diagnosis of major depression at age 26 (active group); (2) those who experienced major depression during the transition to adulthood, ages 18–25, but did not have active depression at age 26 (past group); and (3) individuals not meeting diagnostic criteria for depression during the transition period. Results highlight serious deficits in psychosocial functioning at age 26 linked to both active and past depression. Although participants with active depression experienced the greatest number of problems, those with past depression evidenced similar deficits across many important domains of functioning. The significant impairments characterizing those with past depression indicate the need for continued monitoring to decrease the risk of recurrence and the establishment of a chronic course of illness.