Behavioral disturbances are common in dementia. Polypharmacy due to progression of disease and fluctuation of symptoms among patients might increase risk of overtreatment and/or undertreatment. Drug prescription habits were studied in relationship to symptoms of dementia after relocation of patients to group-living care units (GC). Seventy-six demented patients (mean age 81 years) were assessed before, 12 months after, and 24 months after relocation to GC. Vascular dementia was found in 47%, Alzheimer's dementia in 46%, and other dementias in 7%. Medications, regular or as required, were recorded from medication lists. Repeated observations of symptoms like depressive mood and lack of vitality were made with validated scales. Eighty percent of the patients were prescribed drugs; 40% were given neuroleptics and 9% were given antidepressants. During the 2-year follow-up, polypharmacy increased; patients with five drugs or more increased from 15% to 35%; usage of neuroleptics or sedatives, as required, increased from 8% to 25%, p < .01. Depressive mood was noted in 86% after 2 years and 74% showed aggressiveness and anxiety, but only 12% of the patients with depressive symptoms were on antidepressants. Analgesics were prescribed to 26% of patients. In conclusion, a high proportion of patients with dementia had depressive mood and undertreatment of depressive disorder might be suspected. Polypharmacy increased during the 2-year follow-up; this finding calls for careful monitoring of adverse drug reactions, because of the deteriorating cognitive function of these patients.