The effectiveness of day care versus out-patient care in the treatment of persistent severe anxiety and depression was compared in a controlled clinical trial. Of 96 consecutively referred patients meeting the entry criteria, 92 were followed up for six months. Patients were randomised to day care or out-patient care, and assessed at entry and at six months using the Standardised Psychiatric Interview and in terms of their time structuring and socialisation. Marked improvement in all three measures was seen for most of the day patients, but for few of the out-patients: this difference was highly significant for each measure. Day patients also rated themselves as coping more effectively and as more satisfied with their treatment. These differences could not be explained by differences in use of medication. Day treatment should remain an option for patients with persistent anxiety and depression resistant to outpatient treatment.