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.