Objective Depression is known to negatively impact social functioning, with patients commonly reporting difficulties maintaining social relationships. Moreover, a large body of evidence suggests poor social functioning is not only present in depression but that social functioning is an important factor in illness course and outcome. In addition, good social relationships can play a protective role against the onset of depressive symptoms, particularly in late‐life depression. However, the majority of research in this area has employed self‐report measures of social function. This approach is problematic, as due to their reliance on memory, such measures are prone to error from the neurocognitive impairments of depression, as well as mood‐congruent biases. Method Narrative review based on searches of the Web of Science and PubMed database(s) from the start of the databases, until the end of 2015. Results The present review provides an overview of the literature on social functioning in (late‐life) depression and discusses the potential for new technologies to improve the measurement of social function in depressed older adults. In particular, the use of wearable technology to collect direct, objective measures of social activity, such as physical activity and speech, is considered. Conclusion In order to develop a greater understanding of social functioning in late‐life depression, future research should include the development and validation of more direct, objective measures in conjunction with subjective self‐report measures. Copyright © 2016 John Wiley & Sons, Ltd.