The issue of the differentiation between depression and “understandable” intense sadness (representing a “normal” response to an adverse life event) has significant clinical, scientific, political and ethical implications, which have become particularly visible in the past few decades, in parallel with the escalation of the prevalence rates of depression in the community, of the estimated social costs of depression, of the number of people on treatment for depression, and of the prescriptions of antidepressant medications. According to the DSM-IV, periods of sadness are inherent aspects of the human experience, which should not be diagnosed as a major depressive episode unless criteria are met for severity, duration and clinically significant distress or impairment. The implication of this statement is that “understandable” intense sadness following an adverse life event does qualify for the diagnosis of major depression if the severity, duration and impairment criteria are fulfilled. The proposal has been recently put forward to exclude loss-triggered uncomplicated intense sadness from the DSM-V diagnosis of major depression (i.e., to introduce a “contextual” criterion excluding intense sadness which appears “proportionate” to a loss). However, further research is needed to explore the applicability and reliability of this “contextual” criterion and its clinical utility for the prediction of treatment response and clinical outcome. The limited available research evidence suggests that “situational” major depression does not differ from “non-situational” major depression on many clinical and psychosocial variables, and that response to antidepressant medications is unrelated to whether or not major depression is preceded by a life event.