Research advancements in the use of laboratory testing to diagnose psychiatric conditions have recently led to certain misconceptions about the diagnostic accuracy of these tests. One such test, the dexamethasone suppression test (DST), was introduced as a laboratory test for melancholia (or “endogenous” depression). Because depressed patients are frequently first seen as outpatients by primary care physicians, there has been interest in using the DST as a screening test for depression. This paper lists the variables that contribute to abnormal (false-positive?) DST results and points out the diagnostic limitations of this laboratory test in outpatients. Several guidelines are proposed for diagnosing depression without the DST.