The objective was to develop a new short-form Geriatric Depression Scale (GDS-12R) suitable for older people living in nursing and residential care settings, including those persons with significant cognitive impairment. A total of 308 newly admitted residents of 30 nursing and residential homes in northwest England were interviewed using the Geriatric Depression Scale (GDS-15), the Mini-Mental State Examination, and the Affect Balance Scale (ABS). A 12-item version of the GDS was shown to have greater internal reliability than the 15-item version, because of the context-dependent nature of the deleted items. There was close agreement between the GDS-12R items and another indicator of depressed mood (a single item from the ABS). Furthermore, moderate to high levels of cognitive impairment did not affect the performance of the new version of the scale. The GDS-12R provides researchers and clinicians with a brief, easy-to-administer depression scale that is relevant to residential and nursing home populations.