Negative life events have been reported as a risk factor for depression. However, the mechanism between negative life events and depression is still unclear. This study aimed to explore the mediating role of sleep quality and the moderating role of economic income in the association between negative life events and depression among older adults aged 60 years and over. A multi-stage stratified sampling method was used to select elderly individuals over 60 years old in Shandong, China, making use of the Household Health Interview Survey (2020). In total, 3868 older adults completed the measures of negative life events, sleep quality, depression, and economic income. Negative life events positively predicted depression among the elderly (proportion of direct effect, 55.12%), and poor sleep quality could mediate this association (proportion of indirect effect, 44.87%). Economic income played a moderating role in the relationship between negative life events, sleep quality, and depression (the first and second half of the mediating effect, the direct effect of negative life events on depression). Both effects were weaker among the elderly with higher economic incomes. Negative life events had positive effects on depression in older adults. Economic income moderated the direct effect of negative life events and the mediating effect (first and second half) of sleep quality on depression. When the elderly experience negative life events, interventions for improving their sleep quality and financial support could effectively prevent depression. Geriatr Gerontol Int 2024; 24: 751-757.