The prognosis of depression in the elderly was investigated in a mixed-age sample of 242 consecutive referrals, with DSM-III defined unipolar major depressive episode, to a specialist unit for mood disorders. Subjects were followed up at about 1 and 3.8 years. There was no significant difference in outcome between younger (under 40 years), middle aged (40–59 years) and older (60 years or more) depressed patients. For the 61 elderly subjects with depression, prognosis improved with time, with 25% having a lasting recovery at the first and 41% at the second follow-up. Early onset, recurrence, and poor premorbid personality were associated with a worse prognosis. Three (5%) elderly depressives had committed suicide and seven (11%) had died from natural causes by the second follow-up. Despite some methodological limitations, our findings suggest a more optimistic outlook and the need for longer, more assertive treatment for elderly, depressed patients.