ABSTRACT: Disturbance in sleep quality is a symptom of Major Depressive Disorder (MDD) and Bipolar Disorder (BD) and thus improving quality of sleep is an important aspect of successful treatment. Here, a prospective, double-blind, randomized, placebo-controlled study examined the effect of olanzapine (an atypical antipsychotic) augmentation therapy on sleep architecture, specifically slow wave sleep (SWS), in the treatment of depression. The effect of olanzapine augmentation therapy on other features of sleep (e.g., sleep continuity) and depression (e.g., illness severity and cognitive function) were also determined.Patients currently experiencing a major depressive episode and who were on a stable medication were included. Sleep architecture was measured by overnight ambulatory polysomnography. Illness severity was determined using the Montgomery-Asberg Depression Rating Scale (MADRS). Cognitive function was examined using Cambridge Neuropsychological Test Automated Battery (CANTAB): Spatial Working Memory (SWM), Spatial Span (SSP), and Reaction Time (RTI) tasks. Polysomnographs, clinical measures and cognitive tests were administered at baseline, after 2-4 days of treatment and after 28-31 days of treatment. Twenty-five patients participated in the study (N = 10, N = 15 for placebo and olanzapine treated groups respectively).The primary objective of the study was to assess the objective (polysomnographic) changes in sleep quality, defined as changes in SWS, following olanzapine treatment for depression. Latency to but not duration of SWS was found to significantly differ between olanzapine- and placebo-treated participants (Hedge's g: 0.97, 0.13 respectively). A significant improvement in olanzapine-treated participants over placebo-treated participants was observed in secondary outcome measures, including sleep efficiency, total sleep time, and sleep latency. Secondary objectives assessed the subjective changes in sleep quality parameters and correlated them with measures of illness severity and changes in cognition. MADRS scores were significantly improved in olanzapine-treated participants over time but not more than placebo treatment. There was no significant difference between olanzapine- and placebo-treated participants in SWM, SSP or RTI tasks.Olanzapine augmentation treatment generally did not improve SWS but did improve sleep continuity and depression. Olanzapine may be one of few medications that improve sleep continuity, thus directly targeting symptoms of depression.ClinicalTrials.gov, NCT00520507.