We examined the acute performance and sedative effects of single high and low doses of alprazolam and lorazepam, both before and after chronic, 3-week b.i.d. treatment in elderly adults. The effects of chronic treatment also were examined in this parallel, double-blind, placebo-controlled study. Initial acute low doses significantly impaired total recall and increased intrusion errors. High doses also impaired delayed recall and critical flicker fusion threshold (CFF). Only chronic treatment with high-dose alprazolam increased intrusions and self-rated sedation. Single-dose rechallenge after chronic treatment was associated with significantly less impairment than the initial challenge in memory tasks but not in the discriminant reaction time (DRAT) task. For most memory measures, the development of tolerance was only partial; rechallenge still produced significant deficits in relation to placebo. The development of tolerance was task-specific and depended on drug type and dosage. Despite impairments in various memory functions, CFF, and DRAT, volunteers did not report significant drug-induced changes in sedation.