Inclusion Criteria:

• Meets DSM-IV criteria for dementia
• Meets NINCDS-ADRDA criteria for probable Alzheimer's disease
• Intellectual impairment reported for at least six months
• Availability of family member who has had direct contact with the patient for an average of at least once every week during the three months prior to study entry
• Fulfills criteria for "psychosis" or "behavioral disturbance" defined as follows: A) Criteria for "psychosis" i. based on Columbia University Scale for Psychopathology in Alzheimer's Disease, the presence of a delusion that meets the "narrow" definition, or a hallucination that is rated as "clear" and ii. a Brief Psychiatric Rating Scale (BPRS) score of at least 4 (moderate severity) on one of the following two items: hallucinatory behavior or unusual thought content, or a total score of greater than 6 on these two items added together B) Criteria for "behavioral disturbance" i. a score of greater than 4 on any one of the following BPRS items: hostility, suspiciousness, uncooperativeness (hostile-suspiciousness factor), or a score of greater than 8 on the sum of these three items, or: ii. a score of greater than 4 on one of the following items from the Behavioral Syndromes Scale for Dementia: physical aggression or motor agitation (item score) or catastrophic reaction (global rating for category)
• Free of psychotropic medication for at least two weeks prior to study entry, or able to tolerate medication washout for this period.
• Informed consent by patient and family member, as per IRB procedures at New York State Psychiatric Institute.

Exclusion Criteria:

• History of alcohol or drug dependence (DSM-IV criteria), or history of substance abuse within the past one year
• Major primary affective disorder prior to onset of intellectual deficits
• History of clinical evidence of stroke (patients will be excluded if they demonstrate definite evidence of infarction > 2 cm on any slice on MRI scan, conducted as part of the initial clinical evaluation
• History of clinical evidence of Parkinson's disease, Huntington's disease, tardive dyskinesia, or multiple sclerosis
• Diffuse Lewy body disease by McKeith et al. criteria
• Severe concomitant medical conditions and non-ambulatory patients
• Inability to tolerate psychotropic medication washout for two weeks prior to study entry
• Neuroleptic usage during the 4 weeks prior to study entry.