In a two-year follow-up of 16 patients with mixed symptoms of depression and dementia, eight showed clinical improvement and eight showed deterioration. Improvement at two-year follow-up was associated with several baseline measures: a Folstein Mini-Mental State score of 21 or greater, a Hamilton Depression score of 21 or greater, and a sleep efficiency of less than 75%. These findings suggest that in the elderly with mixed symptoms of depression and dementia, a more favorable outcome is associated with initially greater depressive symptomatology, higher cognitive function, and moderate sleep continuity disturbance ("early morning awakening").