The goals of this study were to assess (1) the prevalence of major and minor depression in Alzheimer's disease (AD), ischemic vascular dementia (IVD), and mixed dementia (AD/IVD); (2) demographic and clinical variables that may be associated with depression; and (3) the relationship between depression severity and the level of functional impairment and cognitive decline. Demographic variables, depression diagnoses, Mini-Mental State Examination scores, and Blessed Roth Dementia Rating Scale scores were compared in patients with AD (N = 582), IVD (N = 48), and mixed dementia (N = 61) using analysis of variance and linear regression models. Data were collected using standardized rating instruments at the time of the patients' initial evaluations at the University dementia clinics. The results were that (1) depression was related to lower education, (2) major depression was more prevalent in IVD compared to probable AD, and (3) functional impairment was greater in patients with minor or major depression compared to patients without depression. Our data suggest that the level of functional disability in dementia may be related to severity of depression. Additional studies are needed to validate our results and examine the contribution of additional neurobiologic factors to the pathophysiology of depression in dementia.