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Background This study investigates how prevalence of depression differs across socioeconomic status (SES) and examines the association of depression with quality of life (QOL) among southwest China's rural elderly population. Methods A cross-sectional survey of 1,629 participants aged ≥60 years was conducted in rural Yunnan Province, China in 2017. Older adults' depressive status and QOL were measured with the Geriatric Depression Scale (GDS-30) and Concise Health Scale (SF-36). A multivariate logistic regression model was used to analyze the association between individual SES variables and the prevalence of depression, while multivariate linear regression was used to model the variation in QOL.Results The overall prevalence of depression was 12.0% in the study population, and females had a higher prevalence of depression than males (14.2% vs. 8.9%, P<0.01). After adjusting for age, sex, and residential status, older adults with lower annual household income and poor access to medical services had a higher probability of suffering from depression than their counterparts (P<0.01). Older adults who suffered from depression also had lower scores in all domains of SF-36 and overall dimensions of physical component summary (PCS) and mental component summary (MCS) than older adults without depression (P<0.01). Multivariate linear regression analysis indicated negative correlations between depression and dimensions of PCS and MCS (P<0.01). Conclusion Improving mental health profoundly transforms quality of life. Future interventions to reduce the prevalence of depression in the elderly should focus on female and low-income populations as well as those with poor access to medical services.LC conceptualized the research idea and drafted the manuscript. JTY and FW carried out the study and drafted the manuscript with the same contributions. JRS and YNL collected the data. ARG provided comments on the paper during the writing process. All authors have read and approved the manuscript.