Diagnosis and treatment of dementia in nursing homes and assisted living facilities remains challenging since response to treatment and disease course varies for the common degenerative dementias. Four cholinesterase inhibitors and an N-methyl-D-aspartate glutamate receptor antagonist are approved by the US Food and Drug Administration for the treatment of Alzheimer's disease (AD). Treatment with AD medications is clinically efficacious and associated with reduced caregiver burden. Some controlled trials have reported that cholinesterase inhibitors and memantine ameliorate dementia-related behavioral symptoms. Antipsychotic therapy is often used for intractable behavioral symptoms or psychosis not responding to nonpharmacologic interventions and antidementia medications; however, the risk/benefit ratio for each patient should be critically evaluated, because treatment with atypical antipsychotics has been associated with serious adverse events, including increased risk for death in older adults with dementia.