To investigate the rate and predictors of onset of DSM-III bipolar I and bipolar II disorders among 6- to 12-year-old prepubertal subjects with DSM-III major depressive disorder (MDD) who were followed for a 2- to 5-year period. This was a prospective, blindly rated study of 79 children with MDD and 31 normal control children matched for age, gender, and socioeconomic status. Subjects and a second informant were assessed at 4-month intervals using the Kiddie Schedule for Affective Disorders and Schizophrenia-Present Episode Version-1986 modified to include 4-month interval ratings and to include DSM-III diagnoses. Family history (FH) was assessed using the FH-Research Diagnostic Criteria obtained from the mother about the subject's first- and second-degree relatives. Bipolarity developed in 31.7% (N = 25) of the children with MDD at a mean age of 11.2 +/- 2.0 years and 80% were prepubertal. Loaded FH and multigenerational FH were significantly associated with bipolar I. Neither prior nor current use of tricyclic antidepressants nor atypical depressive features were predictive. These findings strongly support the need to educate families of children with prepubertal-onset MDD about the possibility of the emergence of manic and hypomanic symptoms to encourage early recognition and appropriate treatment.