Psychiatric comorbidity, particularly depressive disorders, is associated with continued substance use and poor social functioning among methadone maintained patients. Evidence suggests similar neurochemical and environmental pathways may link the two disorders and it is reasonable to hypothesize that pharmacological and environmental factors play important roles in the treating comorbid depression and substance use. The present study tested the efficacy of sertraline for treating syndromally defined depressive disorders among non-abstinent methadone maintained opiate dependent patients. The moderating effects of environmental context on treatment outcome were also examined. Ninety-five patients were randomized in a 12-week, double-blind, placebo-controlled trial of sertraline, a serotonin-selective re-uptake inhibitor. There was no main effect of sertraline on either depression or substance use outcomes. However, sertraline demonstrated significant ameliorative effects on depression among patients with a more positive environment or less negative environment. The odds of being abstinent from heroin and cocaine were greater for patients on sertraline in environments with relatively less adversity. The findings support the hypothesis that contextual factors moderate the efficacy of pharmacological treatment for depression among methadone patients. They also suggest future research should examine a pharmacological treatment that is combined with a behavioral intervention targeting the accessibility of reinforcement or reducing the impact of aversive environmental interactions.