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Background: Depression in old age is an important public health problem responsible for considerable morbidity and disability worldwide and most often causes for depression are multi-factorial and often preventable. A major factor in the context of evaluating depression in the elderly is the role of medical problems, where the under recognition and under treatment of depression is especially common. Aims: To study the prevalence and the possible predictive factors associated with depression in medically ill elderly population. Methodology: A cross sectional study was done among 100 elderly with medical illness attending the tertiary care hospital in Nandyal for a period of 1year September 2012 to September 2013. A semi structured proforma for various sociodemographic factors was administered by interview method and depression was assessed by GDS- Short version. Other scales used were Katz index for ADL, MMSE, and Presumptive stress scale. Descriptive statistics, Chi square, Fisher's exact test, Multiple Logistic regression by SPSS 14. Results: The prevalence of depression in the current study has been found to be 45%. Geriatric depression was more among those from nuclear families [p=0.028] and lower socioeconomic class V and IV [35.5% and 28.8% respectively]; [p=0.024].It was also observed that as the number of co-morbid medical illnesses increase, the depression morbidity increases. [p=0.047]. Diabetes Mellitus type-2 and Cerebrovascular disorders too were significantly associated with depression. [p=0.022 and p=0.009 respectively]. Certain life events and ADL [p=0.015] were observed to be significant predictive factors for depression. Conclusion: The results reaffirm that there is a high prevalence of depression among the geriatric population and adequate measures to detect and control this psychiatric disorder in elderly by specialized gero-psychiatric services are needed.