Cortical evoked potentials in depressives were recorded in order to study stimulus intensity control in this group, and also to study the effect of treatment. In a sample of 33 psychiatric patients, the amplitudes of visual and auditory evoked potentials were found to be significantly greater during depression, than at recovery. The changes which appeared to be due to recovery were found not only in patients treated with tricyclic antidepressants (n = 22), but in those who had recovered following treatment with placebo (n = 11). The changes were most evident in the auditory system. In addition, no diagnostic predictors differentiated depressed patients who subsequently recovered on placebo from those who did not. It is concluded that: (i) cortical evoked potentials may change in amplitude with emotional state; (ii) placebo may have physiological consequences usually attributed to drugs alone.