Late life depression is associated with a significant burden of disease. Estimating depression in older adults can be difficult and requires different methodological approaches from those fitting younger adults. As community prevalence data is scarce in Portugal, we estimated the prevalence of depression in a sample of older Portuguese adults. Moreover, we investigated the association between depression and disability. A cross-sectional comprehensive one-phase survey was conducted of all residents aged 65 and over of one urban and one rural catchment area in Southern Portugal. Standardized 10/66 assessments include a comprehensive cognitive module and the Geriatric Mental State (GMS)-AGECAT. Information on demographics, non-communicable disease risk factors and disability/functioning (WHODAS 2.0) was also recorded. Depression was assessed using both ICD-10 and EURO-D criteria. We interviewed 1405 older people (mean age 74.9, SD = 6.7 years; 55.5% women) after 313 (18.2%) refusals to participate. The prevalence rate for ICD-10 depression was 4.4 (95% CI 3.5-5.6) and 18.0 (95% CI 16.0-20.1) using the EURO-D case definition. As compared with having no depression, ICD-10 depression was associated with a higher level of disability, even after adjusting for confounders (4.8, 95% CI 2.8-8.1). The same happened with subsyndromal depression ('EURO-D only') cases (2.2, 95% CI 1.4-3.5). Non-generalisability of findings outside of catchment areas. In this sample of older Portuguese people, the prevalence of depression was high and so were the associated levels of disability. EURO-D diagnoses may provide a better picture of clinically significant old age depression as a basis for health and social service planning.