Purpose: Pain can increase depression and reduce quality of sleep in older adults. The purpose of this study was to identify level of depression and perceived quality of sleep in older adults with knee osteoarthritis and to examine the relationship between depression and quality of sleep. Methods: Participants were adults with knee osteoarthritis who were over 65 years of age and registered at an orthopedic surgery clinic. Collected data were analyzed using frequencies, percentages, mean and standard deviation, chi-square test, t-test, ANOVA, and partial correlation with SPSS/WIN 20.0 program. Results: There were significant differences in the depression group according to subjective health condition, severity of knee pain and comorbidity. There was a significant positive correlation between depression and perceived quality of sleep composed of sleep efficiency, recognized quality of sleep and daily disturbance. There were also significant differences in perceived quality of sleep in participants who were women, who did not have a job, who viewed their health condition as poor, who had severe knee pain, and other diseases but no abdominal-obesity. Conclusion: Results of this study suggest that attention be given to nursing interventions for perceived quality of sleep and depression especially for older adults with knee osteoarthritis.