Psychosis is quite common in Parkinson's disease (approximately 25% of patients) and therefore constitutes a serious public health problem. All patients suffering from idiopathic Parkinson's disease, and especially elderly and demented patients, are at risk of developing delusions or hallucinations. The most prominent psychotogenic factors are dopaminomimetic agents, which may induce dopamine hypersensitivity in the frontal and limbic dopamine projection regions, and consequently, either directly or indirectly, elicit psychotic signs and symptoms. A Parkinson's disease-related cholinergic deficit in combination with an age-related further loss of cholinergic integrity also plays a prominent role. Psychosis in Parkinson's disease patients appears to be a more important contributor to caregiver distress than motor parkinsonism. Psychosis therefore probably represents the single greatest risk factor for nursing home placement. Typical antipsychotic drugs, because of their selective dopamine receptor antagonistic effects, can reduce psychotic signs but at the cost of an increase in parkinsonism. As a consequence of a non-selective antagonism at both serotonergic and dopaminergic receptors, atypical antipsychotic drugs are associated with fewer extrapyramidal side-effects. On the other hand, hypersensitivity to these agents may induce delirium or a malignant neuroleptic syndrome. Atypical antipsychotic agents such as clozapine, quetiapine and olanzapine should therefore be started at very low doses that are increased gradually. Cholinomimetic therapy may prove to be helpful in the prevention and treatment of psychotic manifestations in Parkinson's disease patients, given the effects observed in patients suffering from dementia with Lewy bodies.