Evidence supports moderate-to-large reductions in anxiety, depression, and perceived stress after smoking cessation; however, much of the available evidence has focused on young adults. Therefore, this study quantified associations between smoking and smoking cessation on prevalent and incident generalised anxiety disorder (GAD) and major depression (MDD) in a nationally representative sample of Irish older adults. Participants (n = 6201) were community dwelling adults aged ≥50 years resident in Ireland. Smoking status and self-reported doctor diagnosis of anxiety or depression prior to baseline were assessed at baseline (i.e., Wave 2). At baseline and 2-, 4-, and 6-year follow-up (i.e., Waves 3-5), GAD and MDD were assessed by the Composite International Diagnostic Interview Short-Form. Logistic regression quantified cross-sectional and prospective associations (odds ratios (ORs) and 95% confidence intervals (95%CIs)) between smoking status and mental health. Prevalence and incidence of GAD was 9.1% (n = 566) and 2.8% (n = 148), respectively. Prevalence and incidence of depression was 11.1% (n = 686) and 6.4% (n = 342), respectively. Following full adjustment, current smokers had higher odds of prevalent GAD (OR = 1.729, 1.332-2.449; p < 0.001) and MDD (OR = 1.967, 1.548-2.499; p < 0.001) than non-smokers. Former smokers had higher odds of prevalent GAD than non-smokers (OR = 1.276, 1.008-1.616; p < 0.001). Current smokers did not have higher odds of incident MDD (OR = 1.399, 0.984-1.990; p = 0.065) or GAD than non-smokers (1.039, 0.624-1.730; p = 0.881). Findings may have important implications for interventions designed to curb tobacco abuse, which tend to be less successful among those with anxiety and depression.