Sexual and gender minority (SGM) older adults report poorer mental health than their cisgender–heterosexual peers. Age discrimination may be a mechanism underlying these disparities. The present study examined whether SGM older adults reported more age discrimination and, in turn, higher depression and anxiety, compared to cisgender–heterosexual older adults. As part of a larger study, 744 older adults (aged ≥50; M = 58.4, SD = 6.2) completed an online survey in September 2021. The survey included measures of depression (Patient Health Questionnaire–8), anxiety (Generalized Anxiety Disorder–7), and age discrimination (an adapted version of the Everyday Discrimination Scale). The sample included five sexual orientation and gender identity (SOGI) groups: cisgender sexual minority men (25.3%), cisgender sexual minority women (21.6%), cisgender–heterosexual men (19.8%), cisgender–heterosexual women (18.5%), and gender minorities (14.8%). We tested the indirect effects of SOGI group on depression and anxiety through age discrimination. Compared to cisgender–heterosexual men and women, all three SGM groups reported more age discrimination, which, in turn, was associated with higher depression and anxiety. Further, compared to cisgender–heterosexual women, cisgender–heterosexual men reported more age discrimination, which, in turn, was associated with higher depression and anxiety. All indirect effects were significant. Age discrimination may be a mechanism underlying the mental health disparities affecting SGM older adults and a promising intervention target.