Women (N = 1,215) and their infants were followed from birth, and maternal reports of depressive symptoms were obtained at 1, 6, 15, 24, and 36 months. Women who never reported symptoms of depression were compared with those who reported symptoms sometimes or chronically. Women with chronic symptoms of depression were the least sensitive when observed playing with their children from infancy through 36 months. Children whose mothers reported feeling depressed performed more poorly on measures of cognitive-linguistic functioning and were rated as less cooperative and more problematic at 36 months. Depression-group differences in school readiness and verbal comprehension were accounted for by maternal sensitivity. Depression-group differences in expressive language and ratings of cooperation were moderated by maternal sensitivity; maternal sensitivity predicted better outcomes more noticeably among children whose mothers reported feeling depressed.