Objectives: To prospectively investigate whether baseline clinical characteristics and medication exposure predict development of major depressive disorder or bipolar disorder in offspring of parents with bipolar disorder. Methods: Youth aged 9-20 years with at least one biological parent with bipolar disorder and no prior history of mood or psychotic episodes (n=93) were prospectively evaluated and treated naturalistically during the study. Participants were divided into two groups: converters, defined as those who met DSM-IV criteria for a mood episode during follow-up (n=19); or non-converters (n=74). Logistic regression models were used to investigate associations between baseline clinical variables and medication exposure during follow-up and risk of developing a first mood episode (conversion). Results: Multivariate regression analyses showed that baseline anxiety disorders and subsyndromal mood disorders were associated with increased risk of conversion during follow-up. Adding medication exposure to the multivariate model showed that exposure to antidepressants during follow-up was associated with increased risk of conversion. Conclusions: Caution should be used when treating bipolar offspring with anxiety and/or emerging depressive symptoms using antidepressant agents, given the increased risk of developing a major mood disorder.