Background/Aims: A 24-week, randomized, parallel-group, double-blind placebo-controlled study was conducted to evaluate the efficacy and tolerability of donepezil in severe Alzheimer’s disease (AD). Methods: Patients with severe AD (Mini-Mental State Examination score 1–12; modified Hachinski Ischemic Score ≤6; Functional Assessment Staging ≧6) were enrolled in this study in Japan. A total of 325 patients were randomized to donepezil 5 mg/day (n = 110), donepezil 10 mg/day (n = 103) or placebo (n = 112). Primary outcome measures were change from baseline to endpoint in the Severe Impairment Battery (SIB) and Clinician’s Interview-Based Impression of Change-plus caregiver input (CIBIC-plus) at the endpoint visit. Results: Donepezil 5 mg/day and 10 mg/day were significantly superior to placebo on the SIB, with a least-squares mean treatment difference of 6.7 and 9.0, respectively (p < 0.001 compared with placebo). CIBIC-plus analyses showed significant differences in favor of donepezil 10 mg/day over placebo at endpoint (p = 0.003). A statistically significant dose-response relationship was demonstrated with the SIB and CIBIC-plus. Donepezil was well tolerated. Conclusion: This study confirmed the effectiveness of donepezil 10 mg/day in patients with severe AD and demonstrated a significant dose-response relationship. Donepezil at dosages of both 5 mg/day and 10 mg/day is safe and well tolerated in Japanese patients with severe AD.