Background The dorsolateral prefrontal cortex (DLPFC) and anterior cingulate cortex (ACC) are critical for mood regulation. Alterations in the white matter connections of these regions may impair their role in mood regulation and increase the risk of developing depression. This study used diffusion tensor imaging to examine for white matter microstructural abnormalities of these regions and of central white matter structures in late-life depression. Methods One hundred six elderly depressed subjects and eighty-four elderly nondepressed subjects underwent clinical assessment and diffusion tensor imaging. The apparent diffusion coefficient (ADC) and fractional anisotropy (FA) were measured in regions of interest placed in the white matter of the DLPFC, ACC, corpus callosum, and internal capsule. Differences between groups were assessed, controlling for age, sex, and total cerebral volume. Results After controlling for covariates, depressed subjects had significantly lower FA values in white matter of the right ACC, bilateral superior frontal gyri, and left middle frontal gyrus. There were no significant differences in ADC values. Conclusions Lower FA, representing lower tissue organization, is observed in depressed elders in the DLPFC and right ACC. These findings support the hypothesis that altered connectivity between brain regions contributes to the risk of depression.