OBJECTIVE In the weeks immediately following psychiatric hospital discharge, severely depressed elderly patients are at risk of 'falling through the cracks' in a complex health care system: becoming lost to follow-up, receiving inadequate care, or requiring prompt readmission. The purpose of this review is to highlight recent literature on the comorbid physical health problems and complex care needs of elderly patients hospitalized for depression. This paper will also review recent initiatives to improve the quality of care transitions for elderly patients discharged from medical hospitals that may be adaptable to a severely depressed population. RESULTS Due to shorter hospital stays, comorbid physical health problems, and limitations in functional capacity, severely depressed elderly patients discharged from psychiatric hospitals have complex service needs, and numerous barriers to care, immediately following hospital discharge. There is a lack of research specifically addressing the transitional care needs of this population. Improvement interventions assigning transitional care providers to chronically medically ill elderly patients immediately after medical hospital discharge have shown decreased rates of rehospitalization and emergency services utilization, and appear to be cost-effective. CONCLUSIONS Further research is needed to adapt successful transitional care interventions targeting chronically ill elderly patients in medical hospitals to severely depressed elderly patients being discharged from psychiatric hospitals.