This thesis aimed to extend the existing psychological and neural basis of social processing in Major Depressive Disorder. This investigation was an attempt to resolve current conflicts and gaps in the social affective neuroscience literature regarding social functioning in depression. Chapter 1 consisted of a general introduction to the current evidence-base and theoretical frameworks surrounding social processing more generally, and in depression more specifically. ‎Chapter 2 provided an exploration of the systemic behavioural biases in in those with depression compared to mentally healthy individuals using a range of social, affective and process measures implemented across the remaining chapters. Then followed a behavioural and neural investigation into self-relevant social processing in depression. Chapter 3 described the process of memory generation implemented across ‎ Chapter 4-6 using a script-driven paradigm. It further discussed the ecological validity of this paradigm using social autobiographical memories. Chapter 4 investigated the neural and behavioural responses to self-relevant autobiographical memories of social rejection and social inclusion in individuals with depression and in healthy controls. The next two chapters discussed the behavioural and neural basis of social processing in depression in response to others’ memories of social rejection and inclusion, using traditional and novel fMRI analysis methodologies in ‎Chapter 5 and ‎‎Chapter 6, respectively. The latter applied a novel intersubject correlation analysis to the same population of depressed and healthy controls as in Chapter 5. Then, Chapter 7 presented a future application of the script-driven imagery paradigm by investigating the effectiveness of different emotion regulation strategies in response to socially salient autobiographical memories in a population of healthy controls. Finally, Chapter 8 provided a general discussion bringing together behavioural and neural findings to provide a clearer understanding of social processing in Major Depressive Disorder. Current theoretical frameworks were used to guide the interpretation of these findings.