Purpose: The purpose of this study was to identify the factors affecting life satisfaction in the communal life of elderly people in rural areas of South Korea. Methods: This was a cross-sectional study. The study respondents were 143 elders (≥ 65-years-old) selected through convenience sampling. The Instrumental Activities of Daily Living (IADL), depression, and life satisfaction were measured. The data were collected from self-reported questionnaires from 1 August to 30 August 2019. Data analysis was performed using the SPSS Program. Results: The IADL scores were significantly different according to age (p < 0.001), education (p < 0.001), and cohabitation (p = 0.003), whereas depression was gender (p = 0.033), age (p = 0.006), education (p = 0.006), and cohabitation (p = 0.039). Life satisfaction was significantly different according to age (p = 0.001), education (p < 0.001), religion (p = 0.008), and cohabitation (p = 0.009). There was a positive correlation between IADL scores and depression (r = 0.37, p < 0.001). There was a negative correlation between life satisfaction and the IADL scores (r = -0.39, p < 0.001) and depression (r = -.66, p < 0.001). Forty-one percent of the respondent’s life satisfaction was explained by depression (p < 0.001), religion (p = 0.021), and IADL scores (p = 0.028).Conclusion: The results of this study may be useful in understanding the life satisfaction level of elderly people in communal living and developing more specific programs for mental and activity programs. Depression management strategies are also needed.