Major depressive disorder (MDD) is often associated with altered emotional reactivity. However, the functional significance of altered emotional reactivity in MDD is uncertain. This study was the first to examine the predictive relationship between intensely sampled ambulatory emotional reactivity and the clinical course of MDD. Forty-six outpatients who met criteria for MDD underwent six days of experience sampling of their ambulatory reactivity to everyday negative and positive life events. After experience sampling, all outpatients received pharmacotherapy with supportive psychotherapy and were followed clinically for 18 months. At one month, less emotional reactivity to negative and positive daily events predicted higher depressive symptom severity. Importantly, patients who exhibited less negative emotional reactivity to daily negative life events were less likely to recover from MDD over the 18 month follow-up. Relationships between ambulatory emotional reactivity and MDD course were not accounted for by the duration or the severity of initial MDD symptoms. Diminished ambulatory emotional reactivity appears to be functionally significant in depression. Intensive sampling of ambulatory emotions may have utility for predicting the clinical course of MDD.