Older racial and ethnic minorities and older adults with dementia have an elevated COVID-19 risk, warranting research into the intersection between these two high-risk groups. We examined whether race-ethnicity moderates the association between dementia and COVID-19 diagnosis. Data were retrieved for 3189 respondents from a nationally representative prospective cohort sample of US older adults aged 65+ years. We analysed the effects of the interaction between race-ethnicity and dementia on COVID-19 diagnosis, after adjusting for sociodemographic factors, health and COVID-19 mitigation behaviours. The odds of COVID-19 diagnosis were significantly lower for Black older adults with dementia (adjusted odds ratio [aOR] = 0.07, 95% CI = 0.01–0.78, P = 0.03). In addition, dementia increased the odds of COVID-19 diagnosis among Hispanic older adults (aOR = 1.59, 95% CI = 0.12–21.29, P = 0.72), although this increase was not statistically significant. The interaction between race-ethnicity and dementia should be considered when assessing COVID-19 risk among older adults. Future research is needed to examine pathways through which dementia may interact with race and ethnicity to influence COVID-19 risk.