Nine outpatients meeting research criteria for probable Alzheimer's disease who had psychosis or behavioral disturbance participated in a single-blind, placebo-controlled pilot study. Oral haloperidol in doses of 1 to 5 mg daily improved target symptoms, confirmed by double-blind ratings of videotaped interviews. Patients could not be maintained on more than 4 mg of haloperidol daily due to the severity of extrapyramidal side effects. Modified Mini-Mental State scores worsened while taking haloperidol, with only partial recovery in the final 4-week placebo phase. Severe extrapyramidal side effects and decline in cognitive function may compromise the efficacy of commonly used doses of neuroleptic drugs in patients with Alzheimer's disease.