Depression in late life is associated with poorer quality of life and higher mortality. Pain, chronic illness, loneliness, loss of physical abilities, grief, cognitive impairment, and socioeconomic disadvantage all increase the risk of depression in this age group. Treatment for depression in late life includes antidepressant medications, cognitive behavior therapy, interpersonal therapy, and electroconvulsive therapy. The use of virtual reality is also proposed as a potential new treatment for depression that could be made available in aged care settings, and early evidence holds promise. Differentiating between depression, dementia, and delirium plays an important role in diagnosis and treatment, and often relies on a comprehensive neuropsychological assessment. The prevention and treatment of depression in late life requires collaboration and cooperation between families, carers, health professionals, and aged care providers.