Eighty-seven out of a clinical cohort of 124 patients with Diagnostic and Statistical Manual of Mental Disorders (3rd ed., rev.) dementia were followed up at monthly intervals for 1 year. Psychotic symptoms were assessed using the Burns's Symptom Checklist, and cognitive functioning was evaluated with the CAMCOG. The annual incidence rate of psychotic symptoms was 47%, although many of the incident symptoms lasted less than 3 months. Fifty-three percent of patients with psychosis experienced resolution of their symptoms. Patients either experienced brief or persistent psychotic disorders, with few having an intermediary course. Persistent psychosis was significantly associated with a 3-month duration of symptoms at baseline. Neuroleptics did not significantly influence the course of psychotic symptoms.