Objective: To study the 12-month outcome of late-onset depression in elderly persons and the predictive factors affecting its outcome. Method: This is a prospective study of 50 patients who had their first major depressive episode (according to DSM-III-R) in old age (60 years and above) and attended the psychiatry services of a tertiary care hospital in India. These patients were assessed at baseline and after 12 months for clinical outcome. Stepwise logistic regression was applied to determine predictive factors for the clinical outcome. Results: Twenty-eight percent of the patients had recovered, 30% had partially recovered, 23% had relapsed, 6% had been continuously ill, 11% had died, and 6% had comorbid dementia. Factors predicting a good outcome (full recovery and continuously well for 1 year) were shorter duration of episode (adjusted odds ratio [OR] = 19.15, 95% confidence interval [CI] 2.12-172.82) and living in joint family system (adjusted OR = 4.88, 95% CI 0.80-29.74). Conclusion: Overall, the 12-month outcome was poor in elderly individuals with late-onset depression.