In a previous report, tonic REM sleep epochs from the all-night sleep EEG were processed and analyzed to produce a diagnostic that discriminated mild Alzheimer's disease (AD) from cognitively unimpaired control subjects. Here, we examine the specificity of this diagnostic in distinguishing depression from AD. Twenty-four cognitively unimpaired seniors (aged 63±1.3) with major depressive disorder (unipolar) were monitored for all-night EEG in a manner identical to that used in our previous report. Tonic REM EEG epochs were preconditioned, spectrally analyzed and compated with known populations of control and AD EEG spectra. Instances when a given depressed subject's spectra fell within spectral zones unique to control or AD populations formed a diagnostic score (control, AD, neither of these). Diagnostic scores correctly identified 88% ( 21 24 ) of cognitively unimpaired seniors with major depressive disorder (unipolar). This can be compared with 89% ( 31 35 ) of mild AD subjects and 100% ( 43 43 ) of control subjects correctly identified in our previous report. This diagnostic also correctly classified as to eventual clinical AD/not AD outcome 8 subjects with both major depressive disorder and validated memory complaints. The diagnostic discrimination of AD is based on the fact that AD subjects have significantly less tonic REM eEG energy in the 13–30 Hz frequency range and more in the 1–10 Hz range than control or depressed subjects, as shown in conventional spectral analysis.