Dementia of the Alzheimer type (DAT) has been linked to losses of cholinergic function in the brain. The acetylcholinesterase inhibitors donepezil, rivastigmine and galantamine improve cognitive performance in manifest dementia. These substances, however, also influence the quality of sleep, and particularly the quality and amount of dreams. We therefore investigated the influence of the time point of donepezil intake on the occurrence of nightmares. We observed a clear-cut relationship between the occurrence of nightmares and an evening dose of donepezil in eight patients with DAT. None of these patients reported nightmares when donepezil was taken in the morning. We suggest that the activation of the visual association cortex during REM sleep is enhanced by donepezil, a mechanism most likely facilitating the development of nightmares in patients with DAT.