Preventing the onset of depression among older people in Japan requires clarifying the social determinants of depression by using longitudinal data, while also taking biological and psychological factors into account. Identification of such determinants may enable more active intervention through social policy. We aimed to reveal the social factors related to depression in Japan's older people and consider associated policy implications. Panel data obtained from a longitudinal survey (Wave 1 to Wave 2) of 3464 elderly subjects, aged 65 years or more, as part of the Aichi Gerontological Evaluation Study (AGES) project was employed. The outcome variable was depression, as evaluated by the Geriatric Depression Scale. Frequency of meeting with friends, social support, hobbies, participation in organizations, life events, illness, self-rated health, instrumental activities of daily living, and sense of coherence were entered as explanatory variables within a logit model for each gender. Of the subjects without mental illness or depression at Wave 1, 14% had become depressed by Wave 2. In both men and women, life events predicted increased odds of depression, while sense of coherence predicted reduced odds. The frequency of meeting with friends, hobbies, and self-rated health predicted reduced odds of depression in men, while age predicted increased odds in women. Overall, social interaction is important for preventing depression in Japan, and that the establishment of a system capable of promoting social interaction and providing care to the elderly during life events may be a useful social policy approach to preventing depression.