OBJECTIVE Severe hyperglycemia and hypoglycemia (“severe dysglycemia”) are serious complications of type 1 diabetes (T1D). Depression has been associated with severe dysglycemia in type 2 diabetes but has not been thoroughly examined specifically in T1D. We evaluated bidirectional associations between depression and severe dysglycemia among older people with T1D. RESEARCH DESIGN AND METHODS We abstracted depression and severe dysglycemia requiring emergency room visit or hospitalization from medical health records in 3,742 patients with T1D during the study period (1996–2015). Cox proportional hazards models estimated the associations between depression and severe dysglycemia in both directions, adjusting for demographics, micro- and macrovascular complications, and HbA1c. RESULTS During the study period, 41% had depression and 376 (11%) and 641 (20%) had hyperglycemia and hypoglycemia, respectively. Depression was strongly associated with a 2.5-fold increased risk of severe hyperglycemic events (hazard ratio [HR] 2.47 [95% CI 2.00, 3.05]) and 89% increased risk of severe hypoglycemic events (HR 1.89 [95% CI 1.61, 2.22]). The association was strongest within the first 6 months (HRhyperglycemia 7.14 [95% CI 5.29, 9.63]; HRhypoglycemia 5.58 [95% CI 4.46, 6.99]) to 1 year (HRhyperglycemia 5.16 [95% CI 3.88, 6.88]; HRhypoglycemia 4.05 [95% CI 3.26, 5.04]) after depression diagnosis. In models specifying severe dysglycemia as the exposure, hyperglycemic and hypoglycemic events were associated with 143% (HR 2.43 [95% CI 2.03, 2.91]) and 74% (HR 1.75 [95% CI 1.49, 2.05]) increased risk of depression, respectively. CONCLUSIONS Depression and severe dysglycemia are associated bidirectionally among patients with T1D. Depression greatly increases the risk of severe hypoglycemic and hyperglycemic events, particularly in the first 6 months to 1 year after diagnosis, and depression risk increases after severe dysglycemia episodes.