Twenty-four subjects with Alzheimer disease underwent cognitive and functional assessment. Functional assessment by caregivers consisted of a 25-item bipolar analog scale measuring activities of daily living and social behaviors divided into four functional domains: memory, attention/executive abilities, everyday skills, and self-care. Cognitive assessment consisted of standardized neuropsychological tests designed to evaluate five cognitive domains: episodic memory, attention/executive function, semantic memory, visuospatial function, and auditory-verbal short-term (working) memory. Functional assessment correlated well with overall severity as measured by Mini Mental State Examination (r = -0.733). Analysis of individual cognitive and functional domains revealed no significant correlation between episodic memory and functional performance. By contrast, functional ability correlated strongly with the cognitive domains of visuospatial function and semantic memory, being significantly greater than the correlation of functional ability with any other cognitive domain. These results were supported by multiple regression analyses that showed visuospatial function to be the sole cognitive predictor of functional abilities. These findings have implications for the evaluation of drug therapies in Alzheimer disease, in particular the effect of current cholinergic therapies on activities of daily living.