IMPORTANCE: Older adults with insomnia have a high risk of incident and recurrent depression. Depression prevention is urgently needed, and such efforts have been neglected for older adults. OBJECTIVE: To examine whether treatment of insomnia disorder with cognitive behavioral therapy for insomnia (CBT-I) compared with an active comparator condition, sleep education therapy (SET), prevents major depressive disorder in older adults. DESIGN, SETTING, AND PARTICIPANTS: This assessor-blinded, parallel-group, single-site randomized clinical trial assessed a community-based sample of 431 people and enrolled 291 adults 60 years or older with insomnia disorder who had no major depression or major health events in past year. Study recruitment was performed from July 1, 2012, to April 30, 2015. The trial protocol was modified to extend follow-up from 24 to 36 months, with follow-up completion in July 2018. Data analysis was performed from March 1, 2019, to March 30, 2020. INTERVENTIONS: Participants were randomized to 2 months of CBT-I (n = 156) or SET (n = 135). MAIN OUTCOMES AND MEASURES: The primary outcome was time to incident major depressive disorder as diagnosed by interview and Diagnostic and Statistical Manual of Mental Disorders (Fifth Edition) criteria. Secondary outcome was sustained remission of insomnia disorder before depression event or duration of follow-up. RESULTS: Among 291 randomized participants (mean SD age, 70.1 6.7 years; 168 57.7% female; 7 2.4% Asian, 32 11.0% Black, 3 1.0% Pacific Islander, 241 82.8% White, 6 2.1% multiracial, and 2 0.7% unknown), 156 were randomized to CBT-I and 135 to SET. A total of 140 participants (89.7%) completed CBT-I and 130 (96.3%) participants completed SET (χ2 = 4.9, P = .03), with 114 (73.1%) completing 24 months of follow-up in the CBT-I group and 117 (86.7%) in the SET group (χ2 = 8.4, P = .004). After protocol modification, 92 (59.0%) of the CBT-I participants and 86 (63.7%) of the SET participants agreed to extended follow-up (χ2 = 0.7, P = .41), with 81 (51.9%) of the CBT-I participants and 77 (57.0%) of the SET group completing 36 months of follow-up (χ2 = 0.8; P = .39). Incident or recurrent major depression occurred in 19 participants (12.2%) in the CBT-I group and in 35 participants (25.9%) in the SET group, with an overall benefit (hazard ratio, 0.51; 95%, CI 0.29-0.88; P = .02) consistent across subgroups. Remission of insomnia disorder continuously sustained before depression event or during follow-up was more likely in CBT-I participants (41 26.3%) compared with the SET participants (26 19.3%, P = .03). Those in the CBT-I group with sustained remission of insomnia disorder had an 82.6% decreased likelihood of depression (hazard ratio, 0.17; 95%, CI 0.04-0.73; P = .02) compared with those in the SET group without sustained remission of insomnia disorder. CONCLUSIONS AND RELEVANCE: The findings of this randomized clinical trial indicate that treatment of insomnia with CBT-I has an overall benefit in the prevention of incident and recurrent major depression in older adults with insomnia disorder. Community-level screening for insomnia concerns in older adults and wide delivery of CBT-I–based treatment for insomnia could substantially advance public health efforts to treat insomnia and prevent depression in this vulnerable older adult population. TRIAL REGISTRATION: ClinicalTrials.gov Identifier: NCT01641263