Depressive disorders are among the most prevalent psychiatric illnesses in the general population. In cancer patients, the prevalence of depression is dramatically increased. In addition to the psychosocial impact of a negative diagnosis, recent evidence suggests that cancer-induced depression (CID) is mediated by biological processes. This oncodynamic effect of cancer on the development of depression is poorly understood, leading to ineffective treatment of CID with drugs that are developed for depressive disorders in the general population. This chapter begins by outlining the clinical profile of major depressive disorder (MDD). We then provide a discussion of the most prominent neurobiological hypotheses of depression, including the monoamine hypothesis, the role of neurotrophins, physiological stress, inflammation, and glutamatergic signalling. The efficacy of current antidepressants is then discussed for depression in the general population and in cancer patients. This leads to a discussion of the biological basis of CID, including the effects of physiological stress, inflammation, and glutamatergic signalling. We conclude that more research is needed to determine oncodynamic events in the development of CID. Development of validated animal models is the first step in delineating contributing biological mechanisms, which will ultimately lead to more targeted drug development and improved efficacy.