Depressive disorders are common among old people in residential and nursing homes. Outside Australia the prevalence rate for depressive symptoms in homes ranges from 30-75% while that for depressive disorders defined by psychiatric diagnostic criteria is well over 20% in many nursing home studies. These rates are between two and twenty times higher than those found among the elderly living at home. Evidence from Australia indicates that a problem of similar magnitude exists here. While physical disability is strongly associated with depression in these populations, it is not the only factor likely to be responsible for the initiation and maintenance of depression among those in long-term care. There is an urgent need for studies which will better define likely aetiological and maintaining factors for depression in institutional populations, as well as controlled trials of both pharmacological treatments and environmental improvements. In addition, research is needed to establish whether depression is an independent risk factor for mortality among institutional residents.