Diffusion tensor imaging (DTI) holds promise for developing our understanding of white-matter pathology in major depressive disorder (MDD). Variable findings in DTI-based investigations ofMDD, however, have thwarted development of this literature. Effects of extra-cellular free-water on the sensitivity of DTI metrics could account for some of this inconsistency. Here we investigated whether applying a free-water correction algorithm to DTI data could improve the sensitivity to detect clinical effects using DTI metrics. Only after applying this correction, we found: a) significantly decreased fractional anisotropy and axial diffusivity (AD) in the left inferior frontooccipital fasciculus (IFOF) in MDD; and b) increased self-reported stress that significantly correlated with decreased IFOF AD in depression. We estimated and confirmed the robustness of differences observed between free-water corrected and uncorrected approaches using bootstrapping. We conclude that applying a free-water correction to DTI data increases the sensitivity of DTI-based metrics to detect clinical effects in MDD. (C) 2015 The Authors. Published by Elsevier Inc.