BACKGROUND: Hospital-based studies suggest that depression in old age relates to organic brain changes. AIMS: To determine whether these findings are confirmed in a population-based sample. METHOD: A population sample of non-demented 85-year-olds (227 mentally healthy and 62 with DSM-III-R depression were given a neuropsychiatric examination and computerised tomographic scans of the brain, and followed for three years. RESULTS: On the Mini-Mental State Examination, those with a low educational level with major depression performed worse than the mentally healthy; this distinction was not evident among those who had received higher education. Measures of brain atrophy were similar in depressed and mentally healthy individuals. The three-year incidence of dementia was increased in those with early-onset major depression. CONCLUSIONS: Higher education may protect against cognitive symptoms in depressed individuals. The association between depression and cerebral atrophy in the elderly is not very strong. The higher incidence of dementia in those with early-onset major depression may be due to a longer lifetime duration of depression, emphasising the importance of detecting and treating depression in the community.