Behavioral problems, and even psychotic symptoms, are universally acknowledged as among the most distressing consequences of dementia. A majority of patients experience either or both at some time during the course of dementia. Agitation is so common that accurate prevalence rates are difficult to ascertain; the available data suggest approximately 70 to 80 per cent of patients manifest this behavior in some form. Psychotic symptoms in some form occur less frequently, but perhaps affect up to half of demented patients at some time. Neuroleptic medications are among the psychoactive drugs most frequently prescribed for the demented elderly, yet they carry the risk of considerable morbidity from side effects, both acute (extrapyramidal syndromes, cardiovascular toxicity, anticholinergic effects) and chronic (tardive dyskinesia). They are most widely used for behavioral and psychotic symptoms; however, their efficacy for these problems is far from unequivocally established. The multiple medical problems of the elderly add to the complexity of diagnosing and managing these symptoms. Systematic delineation of the etiology, course, and prognosis of behavioral and psychotic symptoms may clarify the indications for such treatment. Further research on effective adjuncts and alternatives to neuroleptic treatment in the demented elderly may facilitate patient management, maximizing efficacy and reducing potential adverse consequences.