Behavioral and psychological signs of dementia (BPSD) are common clinical characteristics of Alzheimer's disease (AD). They result in patient and caregivers distress, decreased quality of life and placement in nursing homes. Treatment of BPSD with antidepressant and antipsychotic medications is not without complications and serious adverse effects. The acetylcholinesterase inhibitors (AChEI) show preliminary promise as psychotropic agents possibly able to improve BPSD in AD patients. The present study aimed to evaluate the effect of donepezil (an AChEI) as an only treatment for AD patients with BPSD. Ten consecutive AD patients hospitalized at a psychogeriatric ward due to BPSD were treated with donepezil for 24 weeks. Effect was measured using the NeuroPsychiatric Inventory (NPI). Significant reduction in the presence of delusions, irritability/lability and disinhibition were achieved after 24 weeks of donepezil treatment. This was accompanied by reduction in caregivers distress. The drug was well tolerated and all patients completed the study. Our findings complement the preliminary data that donepezil as well as other AChEIs are promising candidates for further study as psychotropic agents positively affecting BPSD in AD patients.