Psychosis of Alzheimer's disease (PAD) forms part of the behavioural and psychological symptoms of dementia (BPSD). PAD includes symptoms of psychosis such as hallucinations or delusions, and may be associated with agitation, negative symptoms or depression. Even though the US FDA has not approved any medication for the treatment of PAD, atypical antipsychotics have been widely used and favoured by geriatric experts in the management of the condition in view of their modest efficacy and relative safety. However, the recent FDA warnings regarding the cardiac, metabolic, cerebrovascular and mortality risks associated with the use of these drugs in elderly patients with dementia have caused serious concerns regarding their use. Nevertheless, until an effective and safe medication is approved by the regulatory agencies for PAD, clinicians do not have a better choice than atypical antipsychotics for the management of the serious symptoms of this condition.