Background Older persons are often unable to leave conflict areas; however, little is known about the mental and physical health among this population. Our objective was to determine the prevalence of and whether there was an association between psychological distress and disability among older persons affected by conflict in eastern Ukraine. Methods We conducted a cluster-randomized cross-sectional household survey of persons aged ≥60 years in government and non-government controlled areas (GCA and NGCA) of Donetsk and Luhansk regions in January–March 2016. Psychological distress and dependency (degree of disability) were measured using the Kessler K6 Psychological Distress Scale and Katz Index of Independence in Activities of Daily Living, respectively. Association between psychological distress and dependency was assessed using logistic regression adjusting for demographic and socioeconomic characteristics. Results Final sample included 758 and 418 persons in GCA and NGCA, respectively. Prevalence of serious psychological distress was 33.6% (95% Confidence Interval (CI), 28.0 – 39.7%) in GCA and 42.5% (95%CI, 36.1 – 49.2%) in NGCA. Overall, 32.2% (95%CI, 27.9 – 36.7%) of independent persons and 74.0% (95%CI, 65.2 – 81.2%) of moderately/severely dependent persons reported serious psychological distress ( P < .0001). Being dependent, a woman, and having a chronic disease were all significantly associated with psychological distress in a logistic regression model. Conclusions Prevalence of serious psychological distress was very high compared with rates reported from developed countries and was highly associated with disability. Health services for the disabled, including psychological as well as physical support, could help in reducing the proportion of people needing mental health services not normally identified. Electronic supplementary material The online version of this article (10.1186/s13031-019-0194-0) contains supplementary material, which is available to authorized users.