BACKGROUND: Hippocampal volume reduction, declarative memory deficits, and cortisol elevations are reported in persons with major depressive disorder; however, data linking cortisol elevations with hippocampal atrophy are lacking. Prescription corticosteroid-treated patients offer an opportunity to examine corticosteroid effects on hippocampal volume and biochemistry and memory in humans. METHODS: Seventeen patients on long-term prescription corticosteroid therapy and 15 controls of similar age, gender, ethnicity, education, height, and medical history were assessed with magnetic resonance imaging and proton magnetic resonance spectroscopy, the Rey Auditory Verbal Learning Test, Stroop Color Word Test and other neurocognitive measures, the Hamilton Rating Scale for Depression, Young Mania Rating Scale, and Brief Psychiatric Rating Scale. RESULTS: Compared with controls, corticosteroid-treated patients had smaller hippocampal volumes and lower N-acetyl aspartate ratios, lower scores on the Rey Auditory Verbal Learning Test and Stroop Color Word Test, and higher Hamilton Rating Scale for Depression and Brief Psychiatric Rating Scale scores. CONCLUSIONS: Patients receiving chronic corticosteroid therapy have smaller hippocampal volumes, lower N-acetyl aspartate ratios, and declarative memory deficits compared with controls. These findings support the idea that corticosteroid exposure appears to be associated with changes in hippocampal volume and functioning in humans.