Negative interpretation biases have been associated with clinical depression and anxiety. However, ageing is associated with a positivity effect, in which older adults have a positive interpretation bias compared to younger adults. Few studies have compared interpretation biases in younger and older adults and fewer have made this comparison in clinical samples with anxiety and depression. This study conducted a signal detection analysis to assess differences in interpretation biases to ambiguous sentences in a control and a depressed and anxious sample of younger (18–30 years) and older (60+ years) adults. Participants completed an interpretation bias task in which they were presented with unambiguous neutral sentences and ambiguous sentences related to threat. In addition, participants completed a recognition memory task to assess sensitivity and response biases to threat. Clinical anxiety and depression was associated with a negative interpretation bias; however, there were no significant differences in sensitivity or response bias on the recognition memory task. Older age was associated with a positive interpretation bias. Compared to younger adults, older adults showed a positive interpretation bias for ambiguous sentences, and greater sensitivity towards neutral sentences. In contrast, younger adults showed a negative interpretation bias, as well as a response bias towards threatening sentences.