Dysthymia is estimated to afflict at least 3% of the population worldwide. Because it is a chronic disorder, its prevalence is high in psychiatric and general medical settings. The mystery of this incapacitating depressive subtype — long recognized but only recently sanctioned in the DSM-IV and ICD-10 — is that, in their habitual condition, those suffering from dysthymia lack the classical ‘objective’ or ‘major’ signs of acute clinical depression, such as profound changes in psychomotor and vegetative functions. Instead, patients consult their doctors for more fluctuating complaints consisting of gloominess, lethargy, self-doubt, malaise, and lack of joie de vivre. They typically work hard, but do not enjoy their work. If married, they are deadlocked in bitter and unhappy marriages which lead neither to reconciliation nor separation. For them, their entire existence is a burden: they are satisfied with nothing, complain of everything, and brood about the uselessness of existence. As a result, in the past they were labeled ‘existential depressives’ or ‘depressive characters’ and condemned to the couch, often on a chronic basis. Several lines of research over the past fifteen years have shed new light on the biological origins of this disorder. Sleep neurophysiologic findings have shown that many parameters of paradoxical sleep in dysthymia (such as REM percentage, REM latency, and circadian distribution of REM) are similar to those observed in major affective illness. Furthermore, family studies of dysthymia have demonstrated a significant excess of mood disorders. Indeed, dysthymia has been identified in childhood, and prospective follow-up has demonstrated major affective breakdowns including bipolar switches in up to 20%. Coupled with sleep findings, these family and follow-up data suggest that dysthymia is best considered as ‘trait depression’, a constitutional variant of major affective illness. As expected from the early onset chronic nature of the disturbance, in both clinical and epidemiological studies, the social and health burden of dysthymia has been found to be considerable and comparable to that of major medical disorders. The foregoing clinical and biological data have provided the impetus for well-designed pharmacological trials in dysthymia, and a new therapeutic optimism.