Bipolar disorder (BD) often first appears in adolescence after onset of major depressive disorder (MDD), but diagnosis and treatment are commonly delayed. This delay is a concern because untreated BD is associated with adverse long-term outcomes, a more recurrent disease course and difficult-to-treat illness, and suicide attempts and deaths. To examine the association of age at MDD onset with early transition to BD and the subsequent use of psychiatric inpatient services as a severity indicator. This retrospective cohort study analyzed comprehensive data sourced from the Stockholm MDD Cohort data from 1997 to 2018, which encompass both outpatient and inpatient care. Individuals with an initial MDD episode from January 1, 2010, to December 31, 2013, who transitioned to BD by December 31, 2018, were identified. Data were analyzed between September 5 and December 28, 2023. Post MDD assessments included a depression severity index, comorbidities, psychotherapy, psychotropic drugs, and electroconvulsive therapy. The main outcome was the transition from MDD to BD, dichotomized as occurring early (within 3 years of MDD onset) or late (3 years after MDD onset). Secondary outcomes encompassed the use of psychiatric inpatient services post transition and patterns of medication usage. A robust propensity score matching framework was used to estimate outcomes. The final balanced cohort included 228 individuals, with an equal distribution between adults (n = 114; mean [SD] age, 24.5 [6.3] years; 96 female [84.2%]; 20 experiencing an early transition to BD [17.5%]) and youths (n = 114; mean [SD] age, 15.3 [1.6] years; 93 female [81.6%]; 8 experiencing an early transition to BD [7.0%]). Youths were substantially less likely to transition early (odds ratio, 0.42; 95% CI, 0.20-0.88; P = .02), despite having more outpatient visits (mean [SD] visits per month, 1.21 [1.07] vs 0.97 [0.98] for adults; P = .01). Both groups experienced substantially reduced inpatient care following a BD diagnosis, concurring with a marked decline in antidepressant use without increased lithium use. These findings suggest that adolescents may experience delayed BD progression and that diagnosis substantially reduced inpatient care in all age groups, which coincided with a reduction in the use of antidepressants. These findings may inform pharmacologic strategies in patients with first-episode MDD at risk for BD.