Depression is one of the most common emotional problems among youths with insulin dependent diabetes mellitus (IDDM). It has been shown that depression in youths with IDDM lasts a while and may have a role in later complications of the medical condition. And yet, there are no psychological interventions appropriate for such youngsters. The purpose of this study is to modify a treatment called ''Contextual Psychotherapy'' (that has been developed for depressed youngsters) in order to address special needs of depressed youths with IDDM, and to ''pilot test'' the treatment. The youngsters to be recruited are those being cared for at the Diabetes Clinic of the Children's Hospital of Pittsburgh. The treatment includes a 3- month phase (16 sessions), followed by a 3-month ''booster'' phase (3 sessions), and two later follow-up evaluations.