The interface between depression and dementia is complex and has been studied primarily in Alzheimer's disease. This article discusses several aspects of this intriguing area of clinical research, including depressive pseudodementia and the possibility that depression may be a risk factor for the expression of Alzheimer's disease in later life and that depression may occur as a prodrome for this most common dementing disorder. In addition, the treatment challenges faced by clinicians when depression complicates the course of Alzheimer's disease are addressed. It is likely that a combination of behavioral treatment and use of antidepressant medication will provide the optimal management of depression in Alzheimer's disease.