We examined conjoint trajectories of depression-physical illness outcomes in elderly inpatients with minor depression and heart failure or pulmonary disease, and identified demographic, psychosocial, physical, and treatment predictors of trajectory. Consecutively admitted patients over age 50 with heart failure and/or chronic pulmonary disease were screened for minor depression using the Structured Clinical Interview for Depression. Follow-up evaluations were performed at 6 and 12 weeks using the Longitudinal Interview Follow-Up Evaluation, Hamilton Depression Scale, and Chronic Heart Failure-Chronic Respiratory Disease Questionnaire. Patients were placed into four depression-physical illness outcome trajectories: (T#1) depression better, illness better; (T#2) depression better, illness same; (T#3) depression same, illness better; and (T#4) depression same, illness same. Bivariate and multivariate predictors were examined. Minor depression was identified in 587 patients. Of these, 487 were evaluated at 6 weeks and 444 at 12 weeks. By 6 weeks, 39.4% of patients improved both on depression and physical illness (T#1), and 27.3% improved on neither (T#4). By 12 weeks, 49.6% had improved on both and 20.5% on neither. Race, admitting hospital, past psychiatric history, family psychiatric history, comorbid physical illnesses, and antidepressant drug treatment independently predicted outcome trajectory. Improvements in depression and physical illness track closely together in elderly inpatients with heart failure or pulmonary disease. Baseline patient characteristics predict which outcome trajectory they are likely to follow after hospital discharge, and may be useful in diagnosis and management.