Thyroid dysfunction has been implicated as a cause of reversible cognitive impairment and as such, the thyroid stimulating hormone has long been part of the screening laboratory test for dementia. Recently, several population-based studies demonstrated an association between hypo- or hyperthyroidism and Alzheimer's disease. This review discusses the role of thyroid hormone in the normal development and regulation of central nervous system functions and summarizes the studies that have linked thyroid function and dementia risk. Finally, it explores possible biological mechanisms to explain this association, including the direct effects of thyroid hormone on cerebral amyloid processing, neurodegeneration and thyrotropin-mediated mechanisms and vascular mediated enhancement of Alzheimer's disease risk.