Depression and dementia are two very common clinical entities in the elderly population. Differential diagnosis of these disorders may pose difficulties. On the other hand, when they are comorbid, depression and dementia may affect the outcome of each other. When adequate treatment for depression is provided, patients with dementia may experience a significant improvement in cognitive functioning. Therefore, the possibility of comorbid depression and dementia should always be taken into account in the elderly population. This presentation will address the common clinical obstacles encountered while managing these disorders. Using the latest scientific data, the adequate treatment of depression and dementia will be discussed.