Psychosis is relatively common in later life and can present in a wide variety of contexts, including early-onset and late-onset schizophrenia, delusional disorder, mood disorders, and various dementias. It can also occur as the result of numerous medical and neurological diseases and from the use of certain medications. Although identifying the cause of psychosis in older patients can be challenging, the unique clinical features associated with the different disorders can help in making the diagnosis. Accurate diagnosis of psychosis in older populations is essential, as its treatment varies depending on the context in which it appears. Despite the safety concerns regarding the use of antipsychotics in older patients, certain pharmacological treatments appear to be both efficacious and reasonably safe in treating psychosis in older populations. Additionally, although research is limited, numerous psychosocial therapies appear promising. This review summarizes the literature on the epidemiology, clinical characteristics, neuroimaging, and treatment of psychosis in later life, and serves as an update to past reviews on this topic.