The authors explored cognitive functioning of a group of elderly subjects with depression. The group as a whole, and, in particular, the late-onset group (LOD), demonstrated cognitive impairment on the Mattis Dementia Rating Scale (MDRS). Subgroup differences were significant at P=0.004. This between-group difference was not seen when age and level of education were controlled. In the LOD group, 47.5% (vs. 31.5% of the early-onset group [P=0.025]), scored below the cutoff for dementia. Age-at-onset status in a logistic regression model predicted MDRS category, and treatment of the depression had little effect on cognition. Results support the hypothesis that late-life depression, particularly LOD, is associated with cognitive impairment that may represent early AD.