Evidence on the association between widowhood and health is widely available in the literature. However, there is a dearth of analysis on the mechanism through which widowhood affects the health status of an individual, particularly in old age, specifically whether widowhood among the elderly affects their health through their economic conditions. This paper purports to establish both the direct and indirect effects of widowhood on self-reported health status among aged Indians. We examine the mediating effect of economic factors such as income, labor force participation, extent of economic independence and other economic factors in the relationship between widowhood and health status. Structural Equation Modeling (SEM) is employed to test specific hypotheses. We use unit level 60th round data for the year 2004 surveyed by the National Sample Survey Organization (NSSO). The results confirm that poor economic conditions have a mediating effect on the relationship between widowhood and health and, therefore, any policy to reduce the effect of widowhood on health must be based on economic factors.