Background: The impact of depression on cognitive behavioral group therapy (CBGT) for social phobia (SP) in a naturalistic outpatient setting was examined after treatment termination and at 1-year follow-up. Methods: Consecutive SP outpatients (N=219) were diagnosed using a structured interview. CBGT was provided in 18 1.5-hr weekly sessions. At pretreatment and posttreatment questionnaires and clinician ratings were administered. Self-report measures were obtained at 1-year follow-up. The main outcome measure was the Liebowitz Social Anxiety Scale. Results: CBGT was found to be effective in reducing both social anxiety (effect size=1.23) as well as depression (effect size=0.94). Individuals with generalized social phobia (GSP) and individuals with specific social phobia (SSP) differed in their presenting psychopathology and in their response to CBGT. Among treatment completers, 44% GSPs and 37% SSPs achieved at least 50% improvement, and 44% GSPs and 87% SSPs reported distress and functioning within the normal range at the end of treatment. Among SPs diagnosed with major depressive disorder (MDD) at the onset of treatment, SP symptoms aggravated during the follow-up period, whereas SPs not diagnosed with MDD experienced a further alleviation of SP symptoms during follow-up. CBGT provided in a public clinic to non-selected, mostly unmedicated and comorbid patients, is an effective treatment for the majority of SP sufferers. Conclusions: MDD at the onset of CBGT was not associated with poorer treatment response, but predicted exacerbation of SP symptoms following treatment termination. Depressed SPs may need additional intervention to maintain CBGT gains. SSPs may benefit from less intensive CBGT than GSPs. Depression and Anxiety, 2009. © 2009 Wiley-Liss, Inc.