A sample of frail older adults (65 years and over) living at home or institutionalized (n = 664) with a significant functional limitation was used to document predisposing and facilitating factors of severe psychological distress among frail elderly adults. Our results indicated that 48.2 per cent of the older adults living at home presented severe psychological distress symptoms, compared to 34.3 per cent of elderly adults living in institutions. The probability of reporting a severe level of psychological distress was associated with the respondents' social support, cognitive and functional status. When the respondents' cognitive and functional status were controlled, no evidence of a significant association was found between the respondents' age, gender, marital status, education or income and the level of their psychological distress symptoms. Our results showed that 77.9 per cent of the respondents with severe psychological distress symptoms were still severely distressed 12 months after their first interview. Findings suggest that severe psychological distress represents an important challenge for practitioners in gerontology and geriatrics. It is suggested that other studies focusing on the consequences of psychological distress on older adults' quality of life, functional decline, institutionalization and mortality may help document the gravity of this symptomatology in the elderly population.