This study examines the process whereby functional disability amplifies depressive symptoms through decreasing perceived social support and psychological resources. The study analyzed two waves of panel data (1986 to 1992) of a large sample of older adults from the National Institutes of Aging Established Populations for Epidemiologic Studies of the Elderly. The results of longitudinal change models and path analyses show that the perceived availability of a confidant, satisfaction with support, sense of control, and self-esteem mediate the effects of disability on increments in depressive symptoms in late life. Psychological resources play a dominant role in mediating the effects of functional impairment. Scales of sense of control and self-esteem account for 53 percent of the total effect of baseline disability and 43 percent of the total effect of changes in disability on changes in the CES-D depression scale. Self-esteem appears to be the strongest mediator. (Contains 10 notes, 2 tables, and 2 figures.)