Bipolar disorder (BP) is a familial and recurrent illness that significantly affects the child's normal development. BP is often manifested by periods of depression during which the child has significant psychosocial problems and increased risk for suicide. However, most clinical studies have focused on the manic phase of the illness. The depressed phase of the illness in youth is less recognized and less often treated than mania. Moreover, depressed youth with BP are more likely to have more severe depression, greater suicidality, and higher rates of comorbidities and functional impairment relative to depressed youth with major depressive disorder (MDD or "unipolar depression"). However, it is difficult to clinically differentiate the symptoms of BP depression from those of MDD. This issue is very important because youth with BP depression may be treated with antidepressants that can precipitate an episode of mania or mixed BP symptoms. Also, it may take up to 10 years from the initial symptoms of depression until BP is diagnosed and appropriate treatment is prescribed. Thus, early identification of BP youth, especially during depression, is critical not only to improve the long-term prognosis of BP, but also to prevent inappropriate treatments for BP youth. As demonstrated recently in BP adults,improving the accuracy of early diagnosis of BP in youth may be achieved by identifying objective neural biomarkers at an early age that are specific to BP and not common to MDD. Treatment guidelines for BD in children and adolescents were recently developed, but the panel left out depression and agreed that there was insufficient evidence to develop a treatment algorithm for it. Several studies suggest that there are effective and well-tolerated treatment options (e.g., lithium, mood stabilizers, second-generation antipsychotics [SGA]) for manic or mixed episodes of BD in youth; however, there are no maintenance studies in depressed children and adolescents with BP and available data for depressive episodes in BP is limited to one small randomized and two open-label acute treatment studies in adolescents. Management of depression is very different in BP depression than in MDD; antidepressants are widely used in MDD, but may exacerbate or induce mania and suicide in depressed BP youth. Antidepressant monotherapy is therefore contraindicated for the treatment of BP depression, and studies in depressed BP adults show that combining antidepressants with mood stabilizers may also not be effective. In conclusion, early differential diagnosis and treatment of depression in youth is a key factor to enable youth to follow a normal developmental path and prevent an unrecoverable loss in their development.