The authors evaluated a consecutive sample of 542 elderly hospital patients for depression; of these, 160 depressed and 171 nondepressed patients were followed up for a median of 47 weeks after discharge. A subset of 113 depressed patients had significant physical disability. Depressed patients saw physicians more frequently, particularly during the 9- to 12-month period after hospital discharge. Depressed patients also had higher rates of rehospitalization and spent more days in the nursing home. These findings persisted after physical health status was controlled. Patients who remained both depressed and physically disabled during the follow-up period used the most general-medical services during the year after hospital discharge, but did not see mental health specialists any more frequently than those whose depression and physical disability improved. These results underscore the importance of diagnosing and treating depression during and after hospital discharge to increase quality of life and possibly reduce health service use.