The phenomenological diagnosis of depression is successful in increasing diagnostic reliability, but it is a classification scheme without biological bases. One subtype of depression for which evidence suggests a unique biological basis is late-life depression (LLD), with first onset of symptoms after the age of 65. LLD is common and poses a significant burden on affected individuals, caretakers, and society. The pathophysiology of LLD includes disruptions of the neural network underlying mood, which can be conceptualized as the result of dysfunction in multiple underlying biological processes. Here, we briefly review current LLD hypotheses and then describe the characteristics of molecular brain aging and their overlap with disease processes. Further, we propose a new hypothesis for LLD, the Age-by-Disease Interaction hypothesis, which posits that the clinical presentation of LLD is the integrated output of specific biological processes that are pushed in LLD-promoting directions by changes in gene expression naturally occurring during brain aging, hence leading the brain to a physiological state that is more susceptible to LLD, since additional pushes by genetic, environmental and biochemical factors may now be sufficient to generate dysfunctional states that produce depressive symptoms. We put our propositions together into a decanalization model to aid in illustrating how age-related biological changes of the brain can shift the repertoire of available functional states in a pro-depression direction, and how additional factors can readily lead the system into distinct and stable maladaptive phenotypes, including LLD. This model brings together basic research on neuropsychiatric and neurodegenerative diseases more closely with the investigation of normal aging. Specifically, identifying biological processes affected during normal aging may inform the development of new interventions for the prevention and treatment of LLD.