Background: Depression is the most prevalent disabling psychiatric syndrome of aging and may lead to important decrements in the elderly depressed patient's health-related quality of life (HRQL). The goal of this study was to determine whether severity of chronic illness at admission, severity of depressive symptoms at admission, or living alone before admission was associated with lack of improvement in HRQL at 3 months postdischarge among elderly depressed inpatients. Methods: Subjects were 100 consecutive patients admitted to a 26-bed inpatient geriatric psychiatry unit from 1994 through 1997, who were residing in the community and were not demented. At admission, severity of depressive symptoms was assessed using the Geriatric Depression Scale and severity of chronic physical illness was measured using the Cumulative Illness Rating Scale (Geriatrics). HRQL was assessed at admission and again at 3 months postdischarge using the Medical Outcomes Study (MOS) 6-Item General Health Survey. Results: This study found large improvements in all MOS items between admission and 3 months postdischarge. Severity of chronic physical disease was negatively associated with the probability of improvement in three MOS items (role functioning, psychological functioning, and general health perceptions) whereas the severity of depressive symptoms on admission was negatively associated with the probability of improvement in role functioning, social functioning, and bodily pain. Living alone was negatively associated with social functioning but not with any of the other MOS items. Conclusion: The results of this study suggest that the inpatient treatment of depression in the elderly brings about improvements in quality of life that persist for at least 3 months follwing discharge. The patient's initial level of depression and initial level of physical health may be important factors to be considered when evaluating a patient's prognosis.