This study examined the relation between awareness of memory and functional decline and cognitive function in patients with Alzheimer disease (AD). Twenty-six patients with early AD and 16 nondemented elderly controls were studied. Awareness of deficits was determined by using (a) a discrepancy score between subject's and caregiver's ratings on a memory questionnaire, (b) a discrepancy score between subject's and caregiver's ratings on an activities-of-daily-living scale, and (c) a clinical rating of dementia awareness for patients. Whereas self-ratings of memory and activities of daily living were not significantly different between AD patients and controls, these two measures differed significantly when AD patients' ratings were compared with those of their caregivers. Measures of awareness of deficits correlated with one another and were primarily associated with performance on tests of executive and visuospatial functions but not with depression. Early AD is characterized by a failure of self-monitoring. Deficits in self-monitoring have been proposed to occur after damage to the frontal lobes and other cerebral areas. Impaired awareness of memory and functional deficits in AD is related to cognitive impairments, which may involve frontal and right hemisphere connections.