We used data from a 4-year prospective study of 2,558 primary care patients age 65 and older in a large staff model health maintenance organization to examine the association of clinically significant depressive symptoms and eight other chronic medical conditions with quality adjusted life years (QALYs). We developed linear regression models to examine the association of clinically significant depressive symptoms as defined by a score of 16 or greater on the Center for Epidemiological Studies Depression Scale and eight common chronic medical disorders at baseline with QALYs over the 4-year study period. Estimates of QALYs were derived from Quality of Well-Being Scale scores at baseline, at 2-year follow-up, and at 4-year follow-up. Individuals with clinically significant depressive symptoms at baseline had significantly lower QALYs over the 4-year study period than nondepressed subjects, even after adjusting for differences in age, gender, and the eight other chronic medical conditions. In terms of the entire study population, only arthritis and heart disease were more strongly associated with QALYs than depression.