Depression and decline in the ability to perform the daily activities of life affect many elderly. The literature shows that depression and functional decline drive poor health outcomes, higher costs of care and increased mortality in elders. However, more research is needed to examine the relationship between depression and Activities of Daily Living in elders. This project will examine and analyze a secondary data set, the 2004 National Nursing Home Survey Current Resident Questionnaire, on depression in elders and their functional capacity to determine any possible relationship the depression may have to elder's ability to perform everyday tasks. The hypotheses that depression would predict low levels of ADLs, and the hypothesis that gender is a predictive factor for depression in this population, were supported. The results showed that gender was not a predictive factor for low levels of ADLs in those who indicated high levels of depression. Practical implications and future directions were discussed.