The authors reviewed studies published from 1990 to 2001 that address the epidemiology, phenomenology, course, etiology, assessment, and treatment of delusions and hallucinations in Alzheimer's disease. The prevalence of delusions in Alzheimer's disease patients ranged from 16% to 70% (median=36.5%) in the reviewed reports, and the prevalence of hallucinations ranged from 4% to 76% (median=23%). Delusions and hallucinations tended to persist over time, tended to recur often during the course of Alzheimer's disease, and were associated with sociodemographic and clinical correlates that differed from one study to another and with substantial consequences such as functional impairment and aggression. Psychosocial methods and both typical and atypical antipsychotics are effective in the treatment of delusions and hallucinations in Alzheimer's disease.