Study Objectives: To investigate whether cognitive behavior therapy was effective for older adults with comorbid insomnia and depression in a community mental health setting, and explore whether an advanced form of cognitive behavior therapy for insomnia produced better outcomes compared to a standard form of cognitive behavior therapy for insomnia. Methods: An 8-week randomized controlled clinical trial was conducted within community mental health services, Victoria, Australia. Seventy-two older adults (56% female, M age 75 ± 7 years) with diagnosed comorbid insomnia and depression participated. Three conditions were tested using a group therapy format: cognitive behavior therapy for insomnia (CBT-I, standard), cognitive behavior therapy for insomnia plus positive mood strategies (CBT-I+, advanced), psychoeducation control group (PCG, control). The primary outcomes were insomnia severity (Insomnia Severity Index) and depression severity (Geriatric Depression Scale). Primary and secondary measures were collected at pre (week 0), post (week 8), and follow-up (week 20). Results: CBT-I and CBT-I+ both generated significantly greater reductions in insomnia and depression severity compared to PCG from pre to post (p < .001), which were maintained at follow-up. Although the differences between outcomes of the two treatment conditions were not statistically significant, the study was not sufficiently powered to detect either superiority of one treatment or equivalence of the two treatment conditions. Conclusion: CBT-I and CBT-I+ were both effective at reducing insomnia and depression severity for older adults. Mental health services that deliver treatment for comorbid insomnia with cognitive behavior therapy may improve recovery outcomes for older adults with depression. Trial Registration: Australian and New Zealand Clinical Trials Registry (ANZCTR); URL: https://www.anzctr.org.au; Trial ID: ACTRN12615000067572; Date Registered: December 12, 2014.