Dementia-related psychosis (DRP) is prevalent across dementias and typically manifests as delusions and/or hallucinations. The mechanisms underlying psychosis in dementia are unknown; however, neurobiological and pharmacological evidence has implicated multiple signaling pathways and brain regions. Despite differences in dementia pathology, the neurobiology underlying psychosis appears to involve dysregulation of a cortical and limbic pathway involving serotonergic, gamma-aminobutyric acid ergic, glutamatergic, and dopaminergic signaling. Thus, an imbalance in cortical and mesolimbic excitatory tone may drive symptoms of psychosis. Delusions and hallucinations may result from (1) hyperactivation of pyramidal neurons within the visual cortex, causing visual hallucinations and (2) hyperactivation of the mesolimbic pathway, causing both delusions and hallucinations. Modulation of the 5-HT2A receptor may mitigate hyperactivity at both psychosis-associated pathways. Pimavanserin, an atypical antipsychotic, is a selective serotonin inverse agonist/antagonist at 5-HT2A receptors. Pimavanserin may prove beneficial in treating the hallucinations and delusions of DRP without worsening cognitive or motor function.