Inclusion Criteria:

1. Written informed consent
2. Diagnosis of Major Depressive Disorder with Psychotic Features by the DSM-IV
3. Females and Males between the ages of 18-85 years.
4. Female patients of childbearing potential must be using a reliable method of contraception and have a negative urine human chorionic gonadotropin (HCG) test at enrolment
5. Able to understand and comply with the requirements of the study
6. Initial HAM-D-17 score of > 16, both at the screen visit and at the baseline visit.
7. Participants must have an initial BPRS score of > 25 and at least one of the following: > 5 for item 1, > 5 for item 5, > 5 for item 8, > 4 for item 9, > 1 for item 10, > 1 for item 11; these BPRS criteria msut be met both at the screen visit and at the baseline visit.
8. Participants must have an initial CGI score of > 2, both at the screen visit and at the baseline visit.

Exclusion Criteria:

1. Pregnancy or lactation
2. Any DSM-IV Axis I disorder not defined in the inclusion criteria
3. Patients who, in the opinion of the investigator, pose an imminent risk of suicide or a danger to self or others
4. Known intolerance or lack of response to quetiapine fumarate, as judged by the investigator
5. Use of any of the following cytochrome P450 3A4 inhibitors in the 14 days preceding enrolment including but not limited to: ketoconazole, itraconazole, fluconazole, erythromycin, clarithromycin, troleandomycin, indinavir, nelfinavir, ritonavir, fluvoxamine and saquinavir
6. Use of any of the following cytochrome P450 inducers in the 14 days preceding enrollment including but not limited to: phenytoin, carbamazepine, barbiturates, rifampin, St. John's Wort, and glucocorticoids
7. Administration of a depot antipsychotic injection within one dosing interval (for the depot) before randomization
8. Substance or alcohol dependence within the past three months (except dependence in full remission, and except for caffeine or nicotine dependence), as defined by DSM-IV criteria
9. Opiates, amphetamine, barbiturate, cocaine, cannabis, or hallucinogen abuse by DSM-IV criteria within 4 weeks prior to enrolment
10. Medical conditions that would affect absorption, distribution, metabolism, or excretion of study treatment
11. Unstable or inadequately treated medical illness (e.g. diabetes, angina pectoris, hypertension) as judged by the investigator
12. Involvement in the planning and conduct of the study
13. Previous enrolment or randomization of treatment in the present study.
14. Participation in another drug trial within 4 weeks prior enrollment into this study or longer in accordance with local requirements

15. A patient with Diabetes Mellitus (DM) fulfilling one of the following criteria:

    • Unstable DM defined as enrollment glycosylated hemoglobin (HbA1c) > 8.5%.
    • Admitted to hospital for treatment of DM or DM related illness in past 12 weeks.
    • Not under physician care for DM.
    • Physician responsible for patient's DM care has not indicated that patient's DM is controlled.
    • Physician responsible for patient's DM care has not approved patient's participation in the study
    • Has not been on the same dose of oral hypoglycaemic drug(s) and/or diet for the 4 weeks prior to randomization. For thiazolidinediones (glitazones) this period should not be less than 8 Weeks.
    • Taking insulin whose daily dose on one occasion in the past 4 weeks has been more than 10% above or below their mean dose in the preceding 4 weeks
16. An absolute neutrophil count (ANC) of 1.5 x 10^9 per liter
17. Patients with a history seizure disorder; unstable physical disorders (cardiovascular, hepatic, renal, respiratory, endocrine, neurologic, or hematologic); or any physical disorder judged to significantly affect central nervous system function.
18. Patients who are currently treated with antidepressants other than the selective serotonin reuptake inhibitors, with mood stabilizing or antipsychotic drugs other than quetiapine.
19. Patients with known arrhythmias or arrhythmias noted on screening EKG.
20. Outpatients with a CGI score of 7.