Introduction Nepal is an ambivalent society in terms of alcohol use: alcohol consumption is frowned upon among traditionally ruling upper caste people whereas its use is socially accepted among certain lower caste people. We hypothesized that presence of social taboo leads to higher rates of depression among consumers of alcohol and that the explanations of comorbid depression across the two strata could be different. Aims 1) To investigate if belonging to the tabooed social stratum led to higher rates of concomitant major depression. 2) To correlate sociodemographic and clinical factors with the presence of major depression in the two social strata. Methods A cross-sectional survey was carried out among consecutively admitted 188 Alcohol-use disorder (AUD) patients in multiple residential alcohol treatment units in Kathmandu during the period July- December, 2010. We recorded socio-demographic data and administered the alcohol use and depression modules of WHO Composite International Diagnostic Interview (CIDI) 2.1, and the Alcohol-use disorder Identification Test (AUDIT). Results Depressed AUD patients compared to non-depressed AUD patients had significantly more severe alcohol problems and were less likely to be cohabitating with a partner. Lifetime and 12-month prevalence of major depressive episodes among the alcohol abuser/dependent patients were found to be 45% and 36% respectively, with marginally higher rates of major depression in the non-tabooed group. Lacking a stable employment, having experienced alcohol-induced blackout, and longer abstention were positively associated with major depression in the non-tabooed group. In case of the tabooed group, parental problem drinking appeared to be the single most important independent correlate (OR=7.7, 95% CI= 2.6-22.3) of comorbid MD. Conclusions Major depression is common among patients with alcohol-use disorders in Nepal. Among treatment seekers, social taboo on alcohol use seems to have insignificant effect on rates of comorbidity. However, lack of stable source of income and alcohol problem severity in case of the non-tabooed class and familial predisposition in case of the tabooed class may indicate potential risk factors for depressive comorbidity.