['This paper tests the mediating effect of institutional peer support on the relationship between physical declines and depressive symptoms among nursing home residents.', 'As the number of older adults living in nursing homes increases, peer support received from other residents in the institutions is critical to the psychological well-being of residents who face physical declines and reduction in family support. This study tested whether institutional peer support would account for the detrimental effect of physical declines on depressive symptoms of Chinese older people residing in nursing homes.', 'A cross-sectional design was used.', 'The study was conducted between January-March 2009 by convenience sampling. The sample consisted of 187 nursing home residents, with 54 men and 133 women. Interviews were conducted by an experienced research assistant, and responses on physical abilities and institutional peer support were collected. Geriatric Depression Scale was used to assess depressive symptoms of each participant.', 'Participants with poor physical abilities reported more depressive symptoms. Institutional peer support was negatively correlated with physical declines and depressive symptoms. Results of the regression analysis showed that the effect of physical declines on depressive symptoms was no longer significant when the influence of institutional peer support was statistically controlled, indicating a full mediation of institutional peer support on depression of older people.'] Do institutional peer support mediates the impact of physical declines on depressive symptoms of nursing home residents?