The concept of dementia in old age in Australian Aboriginal and Torres Strait Islander communities is intrinsically paradoxical. Firstly, few indigenous people reach old age. Secondly, from some indigenous points of view, dementia is either not recognized as a condition or as a problem, or, in the case of the more disruptive manifestations of cognitive impairment, is perceived as ‘madness’. Moreover, in the wider context of profound political, social and economic inequality experienced by most indigenous people, the western medical category of dementia may appear to be of relatively minor importance. However, government initiatives in aged care generally and dementia care in particular which are designed to address the ageing of the Australian population as a whole also include the nation's older indigenous people. This article—based on a review of published work, supplemented by discussions with indigenous and non‐indigenous individuals involved in indigenous aged care and mental health—examines some of the issues surrounding cognitive decline in old age for Aborigines and Torres Strait Islanders. More specifically, it looks at the problems involved in assessing and diagnosing cognitive decline and dementia, especially among people who follow more traditional ways of life, and in providing services to sufferers and their carers. In doing so, it considers some of the relative meanings of ‘old age’, ‘abnormal old age’, ‘mental disorder’, ‘sickness’ and ‘dementia’. © 1997 John Wiley & Sons, Ltd.