Using multilevel analysis of data of the third wave of the European Social Survey (2006) (n=11.545), this contribution is one of the first sociological studies to address the question if and how overeducation affects mental health. The effects of educational level and overqualification on symptoms of depression are investigated. Learned effectiveness is considered as a mediator of these relations. This study shows that overqualified respondents report higher levels of depressive symptoms. Respondents with a tertiary level of education report less depressive symptoms than those without advanced education. Learned effectiveness mediates the effects of education and overeducation on depression. This study has consequences for the ‘education as fundamental cause’-paradigm. The higher prevalence of overeducation among the highly educated and the negative consequences of overqualification on mental health are in contradiction with the (implicit or explicit) assumption that education has uniformly positive effects on mental health