Glucocorticoids are released in response to stressful experiences and serve many beneficial homeostatic functions. However, dysregulation of glucocorticoids is associated with cognitive impairments and depressive illness^,. In the hippocampus, a brain region densely populated with receptors for stress hormones, stress and glucocorticoids strongly inhibit adult neurogenesis. Decreased neurogenesis has been implicated in the pathogenesis of anxiety and depression, but direct evidence for this role is lacking^,. Here we show that adult-born hippocampal neurons are required for normal expression of the endocrine and behavioural components of the stress response. Using either transgenic or radiation methods to inhibit adult neurogenesis specifically, we find that glucocorticoid levels are slower to recover after moderate stress and are less suppressed by dexamethasone in neurogenesis-deficient mice than intact mice, consistent with a role for the hippocampus in regulation of the hypothalamic–pituitary–adrenal (HPA) axis^,. Relative to controls, neurogenesis-deficient mice also showed increased food avoidance in a novel environment after acute stress, increased behavioural despair in the forced swim test, and decreased sucrose preference, a measure of anhedonia. These findings identify a small subset of neurons within the dentate gyrus that are critical for hippocampal negative control of the HPA axis and support a direct role for adult neurogenesis in depressive illness.