Approximately 10% of elderly patients in primary care have depression yet it is often under-diagnosed and under-treated. It is unclear exactly how patients are being managed in primary care or what factors are associated with referral to psychiatric services. This study aimed to establish in a naturalistic setting how older depressed patients are managed in primary care; to determine which patients are referred to psychiatric services and the differences between patients referred and those not; in terms of primary care consultation rate and degree of co-morbid illness. Computerised records and referral letters were read for 1089 elderly patients in a large practice in central Manchester, UK. Of the 9% identified as depressed, 90% were managed in primary care alone, a third without antidepressants. More than half of those prescribed antidepressants received tricyclic antidepressants. Suicidal ideation and treatment failure were the principle reasons for referral. Patients referred had a greater psychiatric co-morbidity and had consulted their GP more frequently in the past year. Management of depression in the elderly may be conservative and older antidepressants may be over-prescribed. Increased primary care consultation rate and a greater psychiatric co-morbidity may be associated with referral to psychiatric services.