Background: Validation for depression in preschool children has been established; however, to date no empirical investigations of interventions for the early onset disorder have been conducted. Based on this and the modest efficacy of available treatments for childhood depression, the need for novel early interventions has been emphasized. Large effect sizes (ES) for preschool psychotherapies for several Axis I disorders suggest that earlier intervention in depression may also be promising. Therefore, a novel form of treatment for preschool depression, Parent-Child Interaction Therapy Emotion Development (PCIT-ED) was developed and tested. Methods: A preliminary randomized controlled trial (RCT) was conducted comparing PCIT-ED to psycho-education in depressed 3- to 7-year-olds and their caregivers. A total of 54 patients met symptom criteria for DSM-IV major depressive disorder and were randomized, 19 patients completed the active treatment (n = 8 dropouts) and 10 completed psycho-education (n = 17 dropouts). Results: Both groups showed significant improvement in several domains, with PCIT-ED showing significance in a greater number of domains. An intent-to-treat analysis suggested that PCIT-ED was significantly more effective than psycho-education on executive functioning (p = 0.011, ES = 0.12) and emotion recognition skills (p = 0.002, ES = 0.83). Conclusions: The RCT proved feasible and suggests an individual control condition should be used in future trials to minimize differential dropout. These pilot data, although limited by power, suggest that PCIT-ED may be a promising early intervention for depression. Larger scale randomized controlled trials of PCIT-ED for depressed preschoolers are now warranted.