Prevalence rates for dementia are expected to rise exponentially as the elderly population rises. With this comes a corresponding increase in the number of family members who will become dementia caregivers. Caregivers of people with dementia often experience a deterioration in mental health. Identifying factors that relate to caregiver mental health is necessary to develop appropriate interventions. The current study explored how family functioning (measured with a latent variable that includes family cohesion, family balance, and family communication), caregiver expressed emotion (EE), and patient symptom severity related to caregiver mental health (measured with a latent variable that includes depression, anxiety, and stress). Participants included 107 dementia caregivers. The following specific hypotheses were tested: lower levels of both (1) EE and (2) patient symptom severity, and (3) higher levels of family functioning would be related to better caregiver mental health. Results produced a well‐fitting model: X2(18) = 14.858, p = .672; CFI = 1.00; RMSEA = .00; SRMR = .037. Moreover, results indicated that better family functioning (Ɣ = −3.54, SE = 1.34, p = .008), lower levels of caregiver EE (β = .36, SE = 0.07, p < .01), and higher patient symptom severity (β = −3.03, SE = 0.88, p = .001) were related to better caregiver mental health. Results from this study suggest that efforts to bolster family functioning (i.e., enhance communication, promote cohesion, encourage flexibility) could help improve caregiver mental health.