Major depression is a common and debilitating condition. However, initial treatment is ineffective for almost half of all patients. This thesis aims to clarify the mechanisms of a novel putative treatment for depression, transcranial direct current stimulation (tDCS), which targets the dorsolateral prefrontal cortex (DLPFC). The first experimental chapter tests whether DLPFC tDCS alters emotional face perception, akin to the acute effects of antidepressant drugs. Our analyses revealed that tDCS does not exert an antidepressant-like effect on emotion perception, but may affect non-emotional cognition. The second experimental chapter examines neural activation in depressed patients, unaffected first-degree relatives of depressed patients, and healthy controls during the n-back working memory task and a facial emotion processing task. During the n-back, depressed patients showed pronounced DLPFC hypoactivation, while at-risk participants were indistinguishable from healthy controls, consistent with the hypothesis that DLPFC dysfunction might be a useful target for depression treatment. In the final two chapters, I report results from a double-blind randomized controlled trial that for the first time tested DLPFC tDCS as an augmentation strategy to psychotherapy in depression, measuring its neural, cognitive, and clinical effects. On the primary outcome measure (observer-rated depressive symptoms) active tDCS did not show a significant improvement over sham stimulation, although the difference was in the hypothesised direction. However, baseline DLPFC activation during the n-back strongly predicted clinical outcome, with this association specific to the active tDCS condition. Thus, baseline DLPFC activation might serve as a putative ‘biomarker’ for clinical response to tDCS. In the general discussion, these experimental findings are discussed in the context of contemporary theories of depression. This thesis adds new insights into the possible mechanisms of tDCS as a treatment for depression. It also demonstrates the added value of neuroimaging to psychiatry clinical trials, highlighting a potential role for predicting treatment outcome