They found that an extract of the herb, known technically as Hypericum perforatum, was as effective at easing the symptoms of depression as the commonly used drug imipramine.
Scientists from the University of Giessen in Germany, are recommending that the herb should be considered as a first line treatment for patients with mild to moderate depression.
Britons spend around £5m a year on St John's wort and an estimated two million people have tried it.
However, the use of the herb to treat depression has been controversial.
The Medicines Control Agency (MCA) in the UK issued a warning earlier this year advising that the herb should not be used by women taking the contraceptive pill and patients on HIV, depression and migraine treatments.
Source BBC News
Scientists are working to develop a synthetic version of the popular herbal remedy St John's wort so that it does not affect other treatments.
The Department of Health issued advice earlier this year warning patients with certain conditions not to use the supplement.
It followed research which found that St John's wort could interfere with some prescription medicines, including birth control and antibiotics.
But scientists at Cambridge University believe they may be able to develop a form of the herb that will not have these side-effects.
They discovered that hyperforin, the key ingredient of St John's wort, stimulated the production of a liver enzyme called CYP3A.
This means that it causes some drugs to be broken down too fast to be effective.
The enzyme is responsible for the proper metabolism of the body's hormones. It also affects the breakdown of synthetic steroids and many drugs.
The production of this enzyme increases when substances bind themselves to a receptor - the steroid x receptor - within liver cells.
Krishna Chatterjee of Cambridge University said the herbal remedy can affect other drugs because it out performs them within the body.
"It can out-compete other drugs that normally bind to the steroid x receptor."
The team's findings match those of another study, carried out by researchers from the pharmaceutical company Glaxo Wellcome.
Scientists at the company's laboratories in South Carolina in the US recorded similar results.
The Cambridge team is now working with Glaxo Wellcome to develop a synthetic version of hyperforin.
According to New Scientist magazine, they hope to manufacture a form of the herbal remedy that will retain its anti-depressant activities but won't increase the production of the CYP3A liver enzyme and so won't out-compete other drugs.
Steven Kliewer, one of Glaxo Wellcome's scientists, said they will have to carry out more research into St John's wort before they can begin.
"It won't be easy. We first need a better understanding of St John's wort."
St John's wort has been prescribed by doctors in Europe as an effective anti-depressant for many years.
Source BBC News