The dexamethasone suppression test (DST) assesses the functionality of the HPA axis and can be regarded as the first potential biomarker in psychiatry. In 1981, a group of researchers at the University of Michigan published a groundbreaking paper regarding its use for diagnosing melancholic depression, reporting a diagnostic sensitivity of 67% and a specificity of 95%. While this study generated much enthusiasm and high expectations in the field of biological psychiatry, subsequent studies produced equivocal results, leading to the test being rejected by the American Psychiatric Association. The scientific reasons leading to the rise and fall of the DST are assessed in this review, suggestions are provided as to how the original test can be improved, and its potential applications in clinical psychiatry are discussed. An improved, standardized, and validated version of the DST would be a biologically meaningful and useful biomarker in psychiatry, providing a tool for clinicians caring for depressed patients in the areas of diagnosis, treatment, and prognosis, and predicting the risk of suicide. Additionally, such a test could be a crucial part in the generation of biologically homogenous patient cohorts, necessary for the successful development of new psychotropic medications.