This study reports on 122 families with a depressed parent at baseline and matched nondepressed control families. The 10-year course of depression in parents was characterized as stably-, partially-, or non-remitted. At the 10-year follow-up, children of stably-remitted parents had more psychological distress, physical problems, and disturbance than children of controls. Unexpectedly, children of stably-remitted parents had as much distress and disturbance as children of partially- or non-remitted parents. Stably-remitted families emphasized independence less, and organization more, in comparison to controls at 10 years; partially- and non-remitted families were less cohesive and more conflicted than controls. More severe initial or current parental depression was associated with poorer child adaptation, and family functioning explained children's outcomes above and beyond parents' depression. Children living with parents treated for depression are at risk for problems irrespective of the parent's course, perhaps due to poor family functioning.