Magnetization transfer (MT) is a neuroimaging technique that is frequently used to characterize the biophysical abnormalities in both gray and white matter regions of the brain. In our study, we used MT to examine the integrity of key nodes in frontal-subcortical circuits in four subject groups: patients diagnosed with type 2 diabetes with and without major depression (MDD), a healthy control group, and a group diagnosed with MDD without diabetes. In the MDD group, MT studies demonstrated lower magnetization transfer ratios (MTR), a marker of abnormalities in the macromolecular protein pool, in the thalami when compared with the control groups. The group with diabetes and MDD showed lower MTR in the globus pallidus when compared with the group with MDD. Biophysical measures, in subcortical nuclei, correlated inversely with measures of glycemic control, cerebrovascular burden and depression scores. These findings have broad implications for the underlying neuronal circuitry and neurobiology of mood disorders.