Thirty-one of 50 patients satisfying the NINCDS-ADRDA criteria of probable or possible Alzheimer's disease showed psychotic features during a 2-year observation period. Paranoid delusions were reported in 23 patients, delusional misidentification in 17, visual hallucinations in 16 and auditory hallucinations in 8. All of the 7 patients who died within the observation period had suffered from psychotic features even before the preterminal phase of illness. A faster progression of illness towards more severe stages of dementia was associated with paranoid delusions and hallucinations but not with delusional misidentification. We could not prove a significant influence of age, age of onset, cognitive performance, ventricular enlargement or the severity of quantitative electroencephalographic changes at initial examination on the course of illness. This may indicate that specific psychotic features and their potential organic substrate exert an effect on the progression of illness and on survival in Alzheimer's disease, which is not related to gross brain atrophy and generalized neurophysiological changes.