Background: Primary care physicians (PCPs) play a crucial role for guideline-oriented intervention in patients with depression. Objectives: Based on a diagnostic screening questionnaire, this study investigates the sensitivity of PCPs to recognize patients with depression as well as the factors facilitating recognition and concordant diagnostic decisions. Method: In a cross-sectional epidemiological study in six regions of Germany, 3563 unselected patients filled in questionnaires on mental and physical complaints and were diagnostically evaluated by their PCP (N = 253). The patient reports on an established Depression-Screening-Questionnaire (DSQ), which allows the approximate derivation of an ICD-10 depression diagnosis, were compared with the physician diagnosis (N = 3211). In a subsample of discordant cases a comprehensive standardized clinical-diagnostic interview (DIA-X/CIDI) was applied. Results: On the study day, the prevalence of ICD-10 depression was 14.3% according to the DSQ and 10.7% according to the physician diagnosis. Half of the patients identified by DSQ were diagnosed with depression by their physician and two thirds were recognized as mental disorder cases. More severe depression symptomatology and the persistent presence of main depression symptoms were related to better recognition and concordant diagnostic decisions. Diagnostic validation interviews confirmed the DSQ diagnosis in the majority of the false-negative cases. Indications for at least a previous history of depression were found in up to 70% of false-positive cases. Conclusion: Given the high prevalence of depression in primary care patients, there is continued need to improve the recognition and diagnosis of these patients to assure guideline-oriented treatment.