Depression frequently co-occurs with HIV infection and can result in self-reported overestimates of cognitive deficits. Conversely, genuine cognitive dysfunction can lead to an under-appreciation of cognitive deficits. The degree to which depression and cognition influence self-report of capacity for instrumental activities of daily living (IADLs) requires further investigation. This study examined the effects of depression and cognitive deficits on self-appraisal of functional competence among 107 HIV-infected adults. As hypothesized, higher levels of depression were found among those who over-reported problems in medication management, driving, and cognition when compared to those who under-reported or provided accurate self-assessments. In contrast, genuine cognitive dysfunction was predictive of under-reporting of functional deficits. Together, these results suggest that over-reliance on self-reported functional status poses risk for error when diagnoses require documentation of both cognitive impairment and associated functional disability in everyday life.