Introduction To estimate the prevalence, incidence and course of depressive symptoms, their relationship with return-to-work, and prevalence of depression diagnosis/treatment 12 months following a lost-time workplace musculoskeletal injury. Methods In a prospective cohort study, 332 workers' compensation claimants with a back or upper extremity musculoskeletal disorder completed interviews at 1, 6 and 12 months post-injury. Participants self-reported they had not received a depression diagnosis 1 year pre-injury. Cutoff of 16 on the CES-D defined a high level of depressive symptoms. Self-reported data on depression diagnosis and treatment and work status since injury were collected. Results Cumulative incidence of high depressive symptom levels over 12 months was 50.3 % (95 % CI 44.9-55.7 %). At 12 months, 24.7 % (95 % CI 20.1-29.3 %) of workers exhibited high levels. Over 12 months, 49.7 % (95 % CI 44.3-55.1 %) had low levels at all 3 interviews, 14.5 % (95 % CI 10.7-18.2 %) had persistently high levels, and 25.6 % (95 % CI 20.9-30.3 %) demonstrated improvements. Among workers with low baseline levels, incidence of high levels at 12 months was 6.0 % (95 % CI 2.7-9.3 %). For workers with high baseline levels, 36.1 % (95 % CI 27.9-44.3 %) exhibited persistent high symptoms at 6 and 12 months, while 38.4 % (95 % CI 30.1-46.6 %) experienced low levels at 6 and 12 months. Problematic RTW outcomes were common among workers with a poor depressive symptom course. Among workers with persistent high symptoms, 18.8 % (95 % CI 7.7-29.8 %) self-reported receiving a depression diagnosis by 12 months and 29.2 % (95 % CI 16.3-42.0 %) were receiving treatment at 12 months. Conclusions Depressive symptoms are common in the first year following a lost-time musculoskeletal injury and a poor depressive symptom course is associated with problematic RTW outcomes 12 months post-injury. While symptoms appear to improve over time, the first 6 months appear to be important in establishing future symptom levels and may represent a window of opportunity for early screening.