Background: The effects of therapeutic relationship (TR) in elder mental health are understudied. A greater understanding of TR in geriatric psychotherapy is particularly needed for treating late-life depression with executive dysfunction, which predicts poor response to antidepressant medication and presents unique clinical challenges. Methods: Participants were older patients (N = 220) with major depression and executive dysfunction who received 12 weeks of problem-solving therapy or supportive therapy in a randomized control trial. Multilevel growth curve modeling and latent change scores were used to analyze TR dimensions of Understanding and Accepting at the patient level (individual patient ratings, N = 194) and therapist level (ratings of each therapist averaged across participants, N = 10). Results: TR predicted reduction of depression in both treatment groups, while treatment x TR interactions were not significant. Patients treated by therapists with higher average Understanding (patient and therapist level) and Accepting (therapist level) ratings had greater decreases in depression. The patient level x therapist level interaction for Understanding approached statistical significance (p=.065), suggesting a synergistic effect on treatment outcome. Together, Understanding and Accepting predicted 21% of variance in depression level changes. Limitations: TR was not assessed throughout the course of treatment (only after the first therapy session and at post-treatment) and did not include ratings from an objective evaluator. Conclusions: Assessment of patient's experience of the TR and of therapist ability to foster Understanding and Accepting can play a significant role in the delivery of geriatric psychosocial interventions.