OBJECTIVES: To determine whether there were racial or ethnic disparities in the use of antidepressants in low-income elderly patients insured by Medicaid. DESIGN: Examination of 1998 Medicaid claims data. SETTING: Centers for Medicare and Medicaid Services Medicaid claims data for five U.S. states. PARTICIPANTS: All Medicaid recipients aged 65 to 84 with a diagnosis of depression. MEASUREMENTS: Treatment versus no treatment; in those treated, treatment with drugs was classified as old- or new-generation antidepressants. RESULTS: In 1998, 7,339 unique individuals aged 65 to 84 had at least one outpatient encounter with depression as the primary diagnosis. Nearly one in four (24.2%) received no antidepressant drug therapy, and 22% received neither psychotherapy nor an antidepressant. African-American individuals were substantially more likely to be untreated (37.1%) than Hispanic (23.6%), white (22.4%), or Asian (13.8%) individuals. In logistic regression models adjusting for sex, state, long-term care status, and age group, African Americans with a primary diagnosis of depression were almost twice as likely as whites not to receive an antidepressant within the study period (odds ratio51.91, 95% confidence interval51.62–2.24). Patients in long-term care facilities and those aged 65 to 74 were less likely to receive treatment. CONCLUSION: Substantial numbers of elderly Medicaid enrollees with a primary diagnosis of depression did not receive antidepressants or behavioral therapy. This gap in care disproportionately affected African-American patients.