Until recently, little attention has been paid to anxiety symptoms in dementia. However, anxiety is common in this population, and associated with poor outcome and quality of life. The current review examines the existing literature around three major themes: the definition of anxiety in dementia, the properties of available instruments for assessment, and the clinical characteristics of anxiety in this population. Defining anxiety in individuals with dementia is complicated by the overlap between symptoms of anxiety, depression and dementia, and by the influence of the source of information. Several instruments are available to assess anxiety in this population, including general neuropsychiatric instruments and two scales designed specifically for this purpose. The reliability of these instruments is acceptable, but their validity has not been sufficiently examined, and they may discriminate poorly between anxiety and depression. Anxiety may be higher in vascular dementia than in Alzheimer's Disease, and it decreases in the severe stages of dementia. It is associated with poor quality of life and behavioral disturbances, even after controlling for depression. Little is known, however, about its social and environmental correlates. Limitations of the existing literature and key directions for future research are discussed.