Background: Loneliness is defined as a subjective phenomenon, based upon people's perceptions or experiences of a deficiency in their social relationships. Depression is the commonest psychiatric disorder in the elderly. Aim of the study: To assess loneliness and depression among institutionalized and noninstitutionalized elders. Design: A comparative cross- sectional design was used. Setting: The present study was conducted in two different settings, one for recruitment of institutionalized elders and another for noninstitutionalized ones. Subject and Methods: A purposeful sample of two equal groups of 60 elders for each group. Tools: Five tools were used in the present study; a structured interview questionnaire sheet, Mini–Mental State Examination (MMSE), Barthel Index scale, Loneliness Scale and Geriatric Depression Scale (GDS). Results: 6.7% of the non- institutionalized elderly were having high loneliness feeling, compared with 1.7% of the institutionalized ones. 31.7% of the institutionalized elderly were having mild depression, compared with 43.3% of the non- institutionalized ones. Conclusion: Institutionalized ones tend to be older, divorced or widow, with insufficient income, and having a lower perception of own health. Recommendation: More recreational and social activities are recommended, with flexibility in the rules and regulations nursing homes. Elderly should be encouraged to be self-dependent.