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With sociodemographic changes, men are increasingly taking responsibility for spousal caregiving. Previous studies have described gender differences in the psychological outcomes of caregiving; however, few have focused exclusively on husband caregivers. This study investigates the influence of starting spousal caregiving on the psychological well-being of older husbands in rural areas and examines whether living arrangements can moderate this relationship. A total of 1,167 baseline non-caregiver husbands aged 60 and above in rural areas were taken from the 2011–2015 China Health and Retirement Longitudinal Study (CHARLS). The generalized estimating equation (GEE) was employed to examine the effects of spousal caregiving transitions and living arrangement changes on depressive symptoms over four years. Compared with rural husbands who remained non-caregivers, those transitioning into activities of daily living (ADL) caregiving reported higher depressive symptoms at follow-up (B = 1.67, p < 0.05). Moreover, the increase in depressive symptoms when transitioning into ADL caregiving was significantly lower among participants who changed from living with spouse alone to living with spouse and other family members together (B = − 5.37, p < 0.05). There was an association between transitioning into ADL caregiving and an elevated level of depression over four years among older husbands, which could be alleviated by living with family members. Co-residence with family members could serve as a natural support resource, buffering adverse mental health outcomes when older husbands start a demanding caregiving role. [ABSTRACT FROM AUTHOR]