The ability to perform activities of daily living (ADL) function is a multifaceted construct that reflects functionality in different daily life situations. The loss of ADL function due to cognitive impairment is the core feature for the diagnosis of Parkinson’s disease dementia (PDD). In contrast to Alzheimer’s disease, ADL impairment in PD can be compromised by various factors, including motor and non-motor aspects. This narrative review summarizes the current state of knowledge on the association of cognition and ADL function in people with PD and introduces the concept of “cognitive ADL” impairment for those problems in everyday life that are associated with cognitive deterioration as their primary cause. Assessment of cognitive ADL impairment is challenging because self-ratings, informant-ratings, and performance-based assessments seldomly differentiate between “cognitive” and “motor” aspects of ADL. ADL function in PD is related to multiple cognitive domains, with attention, executive function, and memory being particularly relevant. Cognitive ADL impairment is characterized by behavioral anomalies such as trial-and-error behavior or task step omissions, and is associated with lower engagement in everyday behaviors, as suggested by physical activity levels and prolonged sedentary behavior. First evidence shows that physical and multi-domain interventions may improve ADL function, in general, but the evidence is confounded by motor aspects. Large multicenter randomized controlled trials with cognitive ADL function as primary outcome are needed to investigate which pharmacological and non-pharmacological interventions can effectively prevent or delay deterioration of cognitive ADL function, and ultimately the progression and conversion to PDD.