Inclusion Criteria:

• Age 18-70 years old.
• Ability to provide written informed consent.
• DSM IV criteria for a current Major Depressive Episode (MDE) diagnosed by structured clinical interview for DSM IV-TR. Diagnosis will be confirmed by two independent psychiatrists.
• Current MDE at least one year duration OR a history of more than 4 lifetime depressive episodes.

• Treatment-resistant depression defined as:

  1. Failure to respond to a minimum of four different antidepressant treatments.

     AND

  2. Failure or intolerance of an adequate course of electroconvulsive therapy (ECT) during any episode. This must be confirmed by review of medical records.
• A patient may remain on psychotropic medications during this study. However, doses must remain stable during the one month pre-operative evaluation period, the single blind phase and the open stimulation phase.
• If currently in psychotherapy, a patient must have been in this same therapy for at least six months and continue to attend scheduled visits at no greater or lesser frequency than during the last three months.
• All patients must have an established outpatient psychiatrist and be willing to sign a written release to allow study investigators to give and receive information from this psychiatrist.

Exclusion Criteria:

• Inability to tolerate general anesthesia.
• Cerebrovascular risk factors or a previous stroke, documented head trauma or neurodegenerative disorders.
• Other Axis I psychiatric diagnoses including schizophrenia, bipolar I disorder, panic disorder, obsessive-compulsive disorder, generalized anxiety disorder or post-traumatic stress disorder. Patients with severe Axis II personality disorders will also be excluded if they have the potential to interfere with cooperation during the pre- and post-operative phases of the study.
• Current psychotic symptoms.
• Evidence of global cognitive impairment.
• Substance abuse or dependence within the last year.
• Active suicidal ideation.
• Pregnancy.
• General contraindications for DBS surgery (cardiac pacemaker/defibrillator or other implanted devices)
• General contraindications for MRI (metal in the body, VNS etc).
• Inability or unwillingness to comply with long-term follow-up.
• History of intolerance to stimulation of any area of the body
• Participation in another drug, device or biologics trial within the preceding 30 days.
• Conditions requiring repeated MRI scans
• Conditions requiring diathermy
• Conditions requiring anticoagulant medication
• Terminal illness associated with expected survival of <12 months