This paper focuses on a variety of personal and psychosocial factors to identify those that predict better levels of functioning and well-being, and clinical course of depression among depressed outpatients over time. Data are from 604 depressed patients in the Medical Outcomes Study. Regression methods were used to evaluate models of change in outcomes over two years. Improvements in physical health were found among depressed patients who were employed, had major depression, drank less alcohol and had lower will-to-function. Improvements in mental health were found among depressed patients who were employed, had major depression, and active coping styles. Remission was more likely in patients with active coping styles and those seeing medical specialists. Development of a new depressive episode was more likely in patients with avoidance coping styles and lower levels of social support. Findings provide some guidance as to what can be done by providers for depressed patients to improve their levels of physical and mental health as well as to affect the clinical course of depression over time.