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Objective: To study the impact of depression on the wellbeing, disability and use of health services of older adults. Method: Prospective community-based study, using a large (n = 2200) sample of the elderly (55-85) in the Netherlands. Using a 3-year followup, the effect of depressive symptoms (CES-D) on disability, wellbeing and service utilization was assessed, controlling for competing need-for-care (chronic physical illness, functional limitation and cognitive decline), enabling (partner status, size of the social network, social support and locus of control), and predisposing factors (age, sex and level of education). Results: Depressive symptoms have considerable impact on the wellbeing and disability of older people and clear economic consequences caused by inappropriate service utilization. Compared with other need-for-care variables the impact of depression is weaker (service utilization), similar (disability) or stronger (wellbeing). Conclusion: The steeply rising prevalence of competing health risks in later life does not influence the significance of depression.