Background: The aging population of Hong Kong is rapidly growing. Although older adults enjoy a relatively long life expectancy, their psychological health is ranked near the bottom in the world. Objectives: This study assessed the psychological health of older women in Hong Kong and compared it with that of older men. It also aimed to examine if demographic characteristics have similar effects on the psychological health of older women and men. Methods: A standardized questionnaire was administered in face-to-face interviews with 554 participants (288 women and 266 men), aged 70 years or above. Psychological health was measured by the general health questionnaire-30 (GHQ-30), center for epidemiologic studies-depression (CES-D) scale, and life satisfaction index (LSI). Chi square test was performed to examine gender differences in psychological health and determine the relationship between demographic characteristics and psychological health of the elderly. Results: Compared with older men, a greater proportion of older women were at risk of mild psychiatric problems (22.1% vs. 12.3%, P < 0.001), depression (38.6 vs. 18.8%, P < 0.001), and dissatisfaction with life (38.5% vs. 21.5%, P = 0.002). The correlation of psychological health with age, marital status, and educational attainment was not similar among older women and men. Conclusions: Health promotion programs should be implemented to reduce health inequalities among men and women. Effectiveness of programs can be enhanced by targeting the elderly whose psychological health is most vulnerable.