Objective: The authors examined physical illness among elderly patients hospitalized for treatment of major depression, the impact of comorbidity on functional status, and the burden of comorbidity on post-discharge service needs. Methods: Data for this cross-sectional study were derived from patient interviews and abstracted from hospital charts. The sample comprised 195 older adults hospitalized for treatment of depression on the geropsychiatric unit of a large urban teaching hospital and discharged to home. Medical comorbidity was measured with the Cumulative Illness Rating Scale for Geriatrics. A psychiatrist confirmed DSM-IV for Axis I diagnosis of depression, and the Geriatric Depression Scale measured depression severity. Unit nurses administered the Mini-Mental State Exam. They assessed functional dependency via the OARS Multidimensional Functional Assessment Questionnaire. Service needs post-discharge were measured from physician discharge orders and patient scores on standardized tests. Results: Almost three-fourths of depressed elderly patients had at least one comorbid condition requiring first-line treatment; nearly half had two, and one-fourth had three or more. Comorbid physical illness and cognitive impairment was significantly and negatively associated with elderly patients' functional impairment at discharge. Depressed patients with higher medical comorbidity had significantly more needs for services after they left acute care. Conclusion: Medical comorbidity needs to be assessed and considered in planning for post-acute care for depressed elderly patients discharged home.