Objective Moderate alcohol use has been broadly associated with health benefits among older adults, including improved mood. Aims of this study were to evaluate the relationship of moderate alcohol use and depressive symptomatology over a period of eight years, and to examine inflammation, indicated by C‐reactive protein (CRP), as one mechanism by which this relationship functions. Methods The study included 3177 community‐dwelling participants over the age of 65 in 2008 drawn from the Health and Retirement Study. Data from the 2006, 2008, 2012, and 2014 waves were used. Alcohol use was measured via self‐report and was dichotomized as abstinent (0 drinks per week) and moderate (1–14 drinks per week). Inflammation was measured using CRP, which was collected using an enzyme‐linked immunosorbent assay and provided in units of μg/mL. Control variables included gender, age, body mass index (BMI), and medical burden. Results A latent growth curve model with full information maximum likelihood was used, with results revealing that moderate drinkers endorsed fewer depressive symptoms at baseline and a steeper rate of change over time. Abstinent respondents' depressive symptomatology was characterized by a more linear change rate. Further, moderate drinkers had lower CRP levels suggesting that inflammation partially mediates the relationship between moderate alcohol use and depressive symptomatology. Conclusions Moderate alcohol use predicts fewer depressive symptoms among older adults. This relationship is partially moderated by CRP and is eroded by the passage of time. Future research should identify additional mechanisms relating alcohol to positive health outcomes and less depressive symptomatology. Copyright © 2017 John Wiley & Sons, Ltd.