The TIDE project aims to establish personal indicators for initial treatment choice for youth with first episode depression. Specifically, 100 adolescents and young adults (age 12 to 25) with untreated major depressive disorder of recent onset will be randomly allocated in 1:1 ratio to one of two evidence-based regimens for youth depression: (A) Individual cognitive-behavioural therapy; and (B) Optimized pharmacological treatment with an antidepressant. All participants will be offered active treatment for up to 1 year and follow-up for 2 years to establish short- and long-term outcomes, including change in depressive symptoms, maintenance of remission, core role functioning, achievement of educational, occupational and social milestones, and quality of life. Baseline characteristics including duration of untreated depression, pre-existing anxiety, attention-deficit/hyperactivity disorder, substance use, symptoms of reduced interest and activity, sleep, rhythm and melody of speech, brain function, history of childhood adversity, coping style, repetitive thinking, and family history of depression and bipolar disorder will be tested as potential moderators of outcome. Characteristics that differentially predict outcomes in those allocated to initial cognitive-behavioural therapy and those allocated to initial treatment with antidepressants will be combined into a personalized allocation algorithm.