BACKGROUND: Reducing the global treatment gap for mental disorders requires treatments that are economical, effective and culturally appropriate. AIMS: To describe a systematic approach to the development of a brief psychological treatment for patients with severe depression delivered by lay counsellors in primary healthcare. METHOD: The treatment was developed in three stages using a variety of methods: (a) identifying potential strategies; (b) developing a theoretical framework; and (c) evaluating the acceptability, feasibility and effectiveness of the psychological treatment. RESULTS: The Healthy Activity Program (HAP) is delivered over 6-8 sessions and consists of behavioral activation as the core psychological framework with added emphasis on strategies such as problem-solving and activation of social networks. Key elements to improve acceptability and feasibility are also included. In an intention-to-treat analysis of a pilot randomised controlled trial (55 participants), the prevalence of depression (Beck Depression Inventory II ⩾19) after 2 months was lower in the HAP than the control arm (adjusted risk ratio = 0.55, 95% CI 0.32-0.94,P= 0.01). CONCLUSIONS: Our systematic approach to the development of psychological treatments could be extended to other mental disorders. HAP is an acceptable and effective brief psychological treatment for severe depression delivered by lay counsellors in primary care.