A group of 103 people over the age of 60 were assessed on three occasions in the first year following their stroke. The stroke patients were assessed to determine the prevalence and associated factors of poststroke depression (PSD) within the first 12 months poststroke. Assessments were conducted at the time of discharge from the hospital (the acute poststroke stage), at 3 months poststroke, and at 12 months poststroke. Thirty-four caregivers of the stroke patients were also assessed at 3 and 12 months poststroke to examine psychological distress in the caregiver. Approximately one third of the stroke patients were depressed at all three stages of the poststroke period. The strongest predictors of PSD at the acute poststroke stage were left hemisphere stroke, and a history of stroke. At 3 months poststroke, the strongest predictors of PSD were a history of stroke, physical impairment, and impairment of simple attention abilities. The strongest predictors of PSD at 12 months poststroke were a history of stroke, and physical impairment. The prevalence of clinically significant symptoms of psychological disorder did not change significantly between 3 and 12 months poststroke. Although changes were evident in the physical and cognitive functioning of individual patients, on average the group demonstrated no significant recovery of physical functioning. With regard to cognitive functioning, on average the stroke patients demonstrated no significant recovery of general intelligence, simple attention abilities, immediate verbal memory, and verbal fluency. However, by 12 months poststroke, as a group the stroke patients demonstrated significant improvement in basic cognitive functioning and delayed verbal memory, although there was significant decline in complex attention abilities. Depressed patients were more physically impaired at 1 month poststroke than non depressed patients, although no difference between the groups was evident at 3 and 12 months poststroke. Depressed patients did not demonstrate more cognitive impairment, nor did their levels of physical or cognitive functioning improve less, than non-depressed stroke patients. Similarly, patients who had experienced a previous stroke did not demonstrate more physical or cognitive impairment, nor did their levels of functioning improve less, than patients for whom this was their first stroke. PSD at the acute poststroke stage was not related to mortality within the first 12 months poststroke. At 3 months poststroke, 25% of the caregivers reported clinically significant symptoms of psychological disorder. This prevalence decreased to 19% at 12 months poststroke. Patient depression was related to caregiver psychological distress at 3 months poststroke, although this relationship was not evident at 12 months poststroke. The implications of these findings are discussed.