Systematic literature review on outcomes with young people with depression and emerging personality disorder showed clear evidence that this group of young people are severely hampered and adult outcomes are strongly linked to both adult PD as well as adult psychiatric disturbance and lower levels of adult functioning. (Crawford et al, 2008; Kasen et al, 1999; Kasen et al, 2007; Lewinsohn et al, 1999) This argues very clearly for the need to diagnose young people presenting with co-morbid depression and emerging personality disorder in order to intervene and help these young people's struggles as it will prevent poor prognostic adult outcomes. There were no treatment programs that specifically focussed on the treatment of this co-morbid group in the literature. Several studies focussed on the treatment of depression alone and only one RCT focussed on the treatment of adolescent personality disorder (Chanen et al, 2007). In adult studies mentalization-based treatment programs were found to be effective ( as well as cost effective) in a day hospital setting for adults with personality disorder and depression (Bateman, et al, 2007) This study aims to conduct a control trial to test whether MBT will be more effective than TAU in this group. All cases will be tested on admission, at discharge and followed up at 2 years post discharge.