Purpose. The objective of this work was to determine if nursing homes that score differently on prevalence of depression, according to the Minimum Data Set (MDS) quality indicator, also provide different processes of care related to depression. Design and Methods. A cross-sectional study with 396 long-term residents in 14 skilled nursing facilities was conducted: 10 homes in the lower (25th percentile: low prevalence 0-2%) quartile and 4 homes in the upper (75th percentile: high prevalence 12-14%) quartile on the MDS depression quality indicator. Ten care processes related to depression were defined and operationalized into clinical indicators. Measurement of nursing home staff implementation of each care process and the assessment of depressive symptoms were conducted by trained research staff during 3 consecutive 12-hr days (7 a.m. to 7 p.m.), which included resident interviews (Geriatric Depression Scale), direct observations, and medical record review using standardized protocols. Results. The prevalence of depressive symptoms according to independent assessments was significantly higher than prevalence based on the MDS quality indicator and comparable between homes reporting low versus high rates of depression (46% and 41%, respectively). Documentation of depressive symptoms was significantly more common in homes reporting a high prevalence rate; however, documentation of symptoms on the MDS did not result in better treatment or management of depression according to any care-process measure. Psychosocial prevention and intervention efforts, such as resident participation in organized social group activities, were not widely used within either group of homes. Implications. The MDS depression quality indicator underestimates the prevalence of depressive symptoms in all homes but, in particular, among those reporting low or nonexistent rates. The indicator may be more reflective of measurement processes related to detection of symptoms than of prevention, intervention, or management of depression outcomes. A depression quality indicator should not be eliminated from MDS reports because of the importance and prevalence of the condition. However, efforts to improve nursing home staff detection of depressive symptoms should be initiated prior to the use of any MDS-based depression indicator for improvement purposes. Homes that report a low prevalence of depression according to the nationally publicized MDS quality indicator should not be regarded as providing better care.Key Words: Nursing homes, Quality of care, Mental health