Delirium and dementia are two of the most common causes of cognitive impairment in older populations, yet their interrelationship remains poorly understood. Previous studies have documented that dementia is the leading risk factor for delirium; and delirium is an independent risk factor for subsequent dementia. However, a major area of controversy is whether delirium is simply a marker of vulnerability to dementia, whether the impact of delirium is solely related to its precipitating factors, or whether delirium itself can cause permanent neuronal damage and lead to dementia. Ultimately, it is likely that all of these hypotheses are true. Emerging evidence from epidemiological, clinicopathological, neuroimaging, biomarker, and experimental studies provide support for a strong interrelationship and for both shared and distinct pathological mechanisms. Targeting delirium for new preventive and therapeutic approaches may offer the sought-after opportunity for early intervention, preservation of cognitive reserve, and prevention of irreversible cognitive decline in ageing.