Index: wp-includes/category-template.php
===================================================================
--- wp-includes/category-template.php	(revision 6405)
+++ wp-includes/category-template.php	(working copy)
@@ -250,7 +250,8 @@
 		'child_of' => 0, 'feed' => '', 'feed_type' => '',
 		'feed_image' => '', 'exclude' => '',
 		'hierarchical' => true, 'title_li' => __('Categories'),
-		'echo' => 1
+		'echo' => 1,
+		'depth' => 0
 	);
 
 	$r = wp_parse_args( $args, $defaults );
@@ -289,7 +290,7 @@
 			$r['current_category'] = $wp_query->get_queried_object_id();
 
 		if ( $hierarchical )
-			$depth = 0;  // Walk the full depth.
+			$depth = $r['depth'];
 		else
 			$depth = -1; // Flat.