The neuropsychology of dementia and depression is surveyed with a focus on dementia of Alzheimer type (DAT) and depression in old age. Some of the main cognitive deficits in DAT are identified as loss of memory for events and attentional or executive deficit. The course of deterioration across various cognitive domains in DAT is consistent with a posterior-to-anterior spread of pathology in the cerebral cortex. Depressed, elderly patients exhibit a generalised profile of deficits, with impairments in tests shown to be sensitive to temporal or frontal cortex dysfunction. The depressed also exhibit a specific deficit in response to negative feedback (failure) which may contribute to different forms of cognitive dysfunctioning. Gross similarities in the deficits presented by subjects in depression or DAT necessitate a search for qualitative differences between the two, in order to facilitate their differential diagnosis: one such difference is the reversibility of certain of the cognitive deficits following recovery from depression.