Guided by a stress process perspective, we investigated (a) whether marital conflict might directly lead to changes in depression and functional impairment, (b) whether marital conflict might indirectly lead to changes in functional impairment via depression, and (c) whether marital conflict might indirectly lead to changes in depression via functional impairment. We estimated a latent variable causal model using 3 waves of data from the National Survey of Families and Households (N = 1,832). Results indicated that marital conflict directly led to increases in depression and functional impairment and indirectly led to a rise in depression via functional impairment. Overall, findings suggest marital conflict is a significant risk factor for psychological and physical health among midlife and older adults.