Psychiatric inpatients with dementia (N = 61) or depression (N = 67) in late life were 2.6 times more likely to manifest magnetic resonance imaging abnormalities of the brain than were elderly controls (N = 44). Controlling for the effects of age and gender, demented patients were distinguishable from controls by an increased prevalence of cortical atrophy and infarction, while depressed patients exhibited an increased prevalence of cortical infarctions and leukoencephalopathy. Patients with dementia were distinguishable from those with major depression by an increased prevalence of cortical atrophy. These results indicate that major depression in late life, like dementia, is associated with a remarkable increase in overt pathologic changes in the brain.