Major depressive disorder (MDD) and alcohol use disorder (AUD) are serious mental illnesses and commonly co-occur among Veterans. Adequate treatment of depression and comorbid AUD is of major clinical importance at the VA, yet the efficacy of current pharmacotherapy for depression is only modest and remission rates are particularly low in depressed patients with AUD. The delay of weeks or months before the onset of antidepressant effects of traditional antidepressants is also problematic, particularly given the elevated risk for suicide in this population. Furthermore, despite the fact that 40% of patients with MDD have comorbid AUD in their lifetime, AUD patients have been excluded from most antidepressant trials for depression. Thus, there is a critical need to develop effective pharmacotherapy for MDD and AUD. There is a growing body of literature showing that a subanesthetic single intravenous (IV) infusion of ketamine has rapid and robust antidepressant effects. Ketamine was also associated with a rapid reduction in suicidal thoughts in randomized controlled trials. In addition to treating MDD, emerging evidence indicates that ketamine, an NMDA receptor antagonist, might be an effective treatment for AUD by stabilizing glutamatergic system. Building on this evidence, we recently tested ketamine in patients with comorbid MDD and AUD. Our pilot data showed that ketamine may be safe and effective in reducing depression and alcohol consumption. The primary goal of this proposal is to test repeated intravenous ketamine (0.5 mg/kg; once a week; a total of 4 ketamine infusions) as a treatment for MDD and AUD in a total of 60 Veterans. We propose an 8- week, randomized, double-blind, placebo-controlled trial. The study will have two phases: 1) a 4-week treatment phase and 2) a 4-week follow-up phase. All patients will be evaluated daily by using ecological momentary assessment and will receive usual standard care during this trial. There are five objectives. Aim #1: To evaluate whether ketamine is superior to active placebo (midazolam) in treating depression in Veterans with comorbid MDD and AUD. We hypothesize that ketamine is superior to active placebo in clinical response for treating depression. The clinical response will be defined as a ≥ 50% improvement from baseline in Montgomery-Åsberg Depression Rating Scale (MADRS) score. Aim #2: To evaluate whether ketamine is superior to active placebo (midazolam) in reducing alcohol use in Veterans with comorbid MDD and AUD. We hypothesize that ketamine is superior to active placebo in reducing drinking as measured by the Time Line Follow Back (TLFB). Aim #3: To evaluate whether ketamine is superior to active placebo (midazolam) in reducing alcohol craving during the 8-week study period. We hypothesize that ketamine is superior to active placebo (midazolam) in reducing alcohol craving as measured by the Alcohol Urges Questionnaire (AUQ). Aim #4: To evaluate whether ketamine is superior to active plac...