Associations between depression and impaired functioning are well known and have been documented in numerous clinical, primary care and epidemiological studies. Reviews of this research have focused on the elderly. Recent studies suggest that women become increasingly vulnerable during the menopausal transition to declines in physical and role function and increases in depressive symptoms. The purpose of the current research is to review the literature since 1966 for studies examining the association between depression and physical and psychosocial impairment in midlife women. We selected only longitudinal studies that had the potential to elucidate the nature of the complex relationship between depression and functioning. Results of the review indicate evidence for bi-directional associations between depression and functioning in middle-aged women. However, the studies are only broadly informative. Most adjusted for only a limited group of factors that could be associated with both depression and functioning. None of them directly examined potential moderators or mediators of the relationship between depression and impaired functioning.