Research in healthy controls has found that mood influences cognitive processing via level of action identification: happy moods are associated with global and abstract processing; sad moods are associated with local and concrete processing. However, this pattern seems inconsistent with the high level of abstract processing observed in depressed patients, leading Watkins (2008, 2010) to hypothesise that the association between mood and level of goal/action identification is impaired in depression. We tested this hypothesis by measuring level of identification on the Behavioural Identification Form after happy and sad mood inductions in never-depressed controls and currently depressed patients. Participants used increasingly concrete action identifications as they became sadder and less happy, but this effect was moderated by depression status. Consistent with Watkins' (2008) hypothesis, increases in sad mood and decreases in happiness were associated with shifts towards the use of more concrete action identifications in never-depressed individuals, but not in depressed patients. These findings suggest that the putatively adaptive association between mood and level of identification is impaired in major depression.