Neuropsychiatric abnormalities, as well as the commonly associated neuropsychological symptoms, are clinical characteristics of Alzheimer’s disease (AD), the most common form of dementia. Thus, in addition to a general cognitive and functional decline, neuropsychiatric manifestations, such as agitation, apathy, anxiety, psychoses and disinhibition, are frequently evident in AD patients. Such neuropsychiatric symptoms of AD are the source of considerable patient and caregiver distress, resulting in the prescription of neuroleptics, benzodiazepines or other psychotropic agents, and are a major factor in the decision to transfer the care of patients into nursing homes. Recent evidence suggests that some neuropsychiatric changes associated with AD are related to the cholinergic deficits in the brains of AD patients and that such abnormalities may be responsive to cholinergic therapy. Cholinergic drug therapies indicated for the symptomatic treatment of AD, for example tacrine and the newer cholinesterase (ChE) inhibitors such as donepezil, have been demonstrated to improve memory, language and praxis. Furthermore, although less is known about the effect of ChE inhibitors on the neuropsychiatric symptoms of AD, preliminary evidence suggests that they reduce apathy, anxiety, hallucinations, disinhibition and aberrant motor behaviour. Thus, the newer-generation ChE inhibitors that are well tolerated, easy to administer and show promise in reducing the cognitive, as well as neuropsychiatric disturbances of AD, may emerge as important treatments for some neuropsychiatric symptoms in patients with central cholinergic deficits, including AD.