The primary objective of our study was to examine the role of atrophy, high intensity lesions and medical comorbidity in the pathophysiology of major depressive disorder in the elderly (late-life MDD). Our sample was comprised of 51 patients with late-life MDD and 30 non-depressed controls. All subjects were scanned on 1.5 tesla magnetic resonance imaging scanner (MRI) and absolute and normalized measures of brain and lesion volumes were obtained and used for comparison between groups. Patients with MDD had significantly smaller frontal lobe volumes, together with larger whole brain lesion volumes when compared with controls (p < .05). Whole brain lesion volumes correlated significantly (r = 0.41, p = .006) with overall medical comorbidity. The odds ratio (OR) for existing MDD increases significantly with a decrease in frontal lobe volume and an increase in whole brain lesion volumes (p < .05). Our findings suggest that atrophy and high intensity lesions represent relatively independent pathways to late-life MDD. While medical disorders lead to neuropathological changes that are captured on MR imaging as high intensity signals, atrophy may represent a relatively autonomous phenomenon. These findings have broad implications for the pathophysiology of mood disorders and suggest that complementary neurobiological processes may lead to cumulative neuronal injury thereby predisposing to clinical depression.