Patients with late-life depression (LLD) have a more variable response to pharmacotherapy relative to patients with mid-life depression. Degeneration of the serotonergic system and lower occupancy of the initial target for antidepressant medications, the serotonin transporter (5-HTT), may contribute to variability in treatment response. The focus of this study was to test the hypotheses that lower cortical and limbic serotonin transporter (5-HTT) availability in LLD patients relative to controls and less 5-HTT occupancy by antidepressant medications would be associated with less improvement in mood and cognition with treatment in LLD patients. Twenty LLD patients meeting DSM-IV criteria for a current major depressive episode and 20 non-depressed controls underwent clinical and neuropsychological assessments, magnetic resonance imaging to measure gray matter volumes and high-resolution positron emission tomography (PET) scanning to measure 5-HTT before and after 10–12 weeks of treatment with Citalopram or Sertraline (patients only). Prior to treatment, 5-HTT was lower in LLD patients relative to controls in mainly temporal cortical and limbic (amygdala and hippocampus) regions. Gray matter volumes were not significantly different between groups. 5-HTT occupancy was detected throughout cortical, striatal, thalamic and limbic regions. The magnitude of regional 5-HTT occupancy by antidepressants was 70% or greater across cortical and sub-cortical regions, consistent with the magnitude of 5-HTT occupancy observed in mid-life depressed patients. Greater regional 5-HTT occupancy correlated with greater improvement in depressive symptoms and visual-spatial memory performance. These data support the hypothesis that serotonin degeneration and variability in 5-HTT occupancy may contribute to heterogeneity in treatment response in LLD patients.