Late-life depression (LLD) is a common and burdensome psychiatric disorder in older adults, frequently accompanied by sleep disturbances and low-grade systemic inflammation. Despite its high prevalence and resistance to standard treatments, the biological mechanisms underlying LLD remain incompletely understood. This thesis proposes a mechanistic framework in which sleep disturbance contributes to the onset and persistence of LLD via activation of inflammatory pathways. This work integrates findings from five original research studies conducted in community-dwelling older adults, drawing on both subjective and objective sleep measures as well as molecular and cellular markers of inflammation. Across studies, sleep disturbance was consistently associated with increased cellular, nuclear, and transcriptional markers of inflammation. Furthermore, elevated inflammation was found to moderate the relationship between sleep disturbance and core symptoms of LLD, including depressed mood and impaired reward processing. Collectively, these findings provide empirical support for a biologically grounded framework in which sleep disturbance exacerbates inflammation, thereby increasing vulnerability to depressive symptoms in older adults. The results underscore the importance of targeting sleep and inflammation as modifiable risk factors in the prevention and treatment of LLD.