Anxiety that co-occurred with depression in a sample of 63 depressed adolescents was linked to higher depression scores at the beginning of treatment and poorer outcomes in the reduction of depressive symptoms at the completion of treatment. Adolescents whose depression and functioning improved during treatment also showed a reduction in anxiety, but largely unrelated to treatment condition. Overall, the findings indicate that depressed adolescents with co-occurring anxiety disorder have more severe depression and may be more resistant to treatment. Clinicians should determine the severity of both anxiety and depression prior to treatment. When anxiety and depression are severe, the intervention should be structured to address the anxiety as well as the depression. This randomized clinical trial was conducted from April 1, 1999, through July 31, 2002. Sixty-three depressed adolescents, ages 12 to 18, received either interpersonal psychotherapy or the usual treatment by school-based mental health clinicians. Adolescents with and without probable co-occurring anxiety disorders were compared on depression and overall functioning. Assessments at baseline and at completion of the program were performed by a psychologist or social worker who did not know the patient's treatment condition. 2 tables, 1 figure, and 33 references