BACKGROUND: The prevalence of dementia is of interest worldwide. Contemporary estimates are needed to plan for future care provision, but much evidence is decades old. We aimed to investigate whether the prevalence of dementia had changed in the past two decades by repeating the same approach and diagnostic methods as used in the Medical Research Council Cognitive Function and Ageing Study (MRC CFAS) in three of the original study areas in England. METHODS: Between 1989 and 1994, MRC CFAS investigators did baseline interviews in populations aged 65 years and older in six geographically defined areas in England and Wales. A two stage process, with screening followed by diagnostic assessment, was used to obtain data for algorithmic diagnoses (geriatric mental state-automated geriatric examination for computer assisted taxonomy), which were then used to estimate dementia prevalence. Data from three of these areas--Cambridgeshire, Newcastle, and Nottingham--were selected for CFAS I. Between 2008 and 2011, new fieldwork was done in the same three areas for the CFAS II study. For both CFAS I and II, each area needed to include 2500 individuals aged 65 years and older to provide power for geographical and generational comparison. Sampling was stratified according to age group (65-74 years vs ≥75 years). CFAS II used identical sampling, approach, and diagnostic methods to CFAS I, except that screening and assessement were combined into one stage. Prevalence estimates were calculated using inverse probability weighting methods to adjust for sampling design and non-response. Full likelihood Bayesian models were used to investigate informative non-response. FINDINGS: 7635 people aged 65 years or older were interviewed in CFAS I (9602 approached, 80% response) in Cambridgeshire, Newcastle, and Nottingham, with 1457 being diagnostically assessed. In the same geographical areas, the CFAS II investigators interviewed 7796 individuals (14,242 approached, 242 with limited frailty information, 56% response). Using CFAS I age and sex specific estimates of prevalence in individuals aged 65 years or older, standardised to the 2011 population, 8·3% (884,000) of this population would be expected to have dementia in 2011. However, CFAS II shows that the prevalence is lower (6·5%; 670,000), a decrease of 1·8% (odds ratio for CFAS II vs CFAS I 0·7, 95% CI 0·6-0·9, p=0·003). Sensitivity analyses suggest that these estimates are robust to the change in response. INTERPRETATION: This study provides further evidence that a cohort effect exists in dementia prevalence. Later-born populations have a lower risk of prevalent dementia than those born earlier in the past century. FUNDING: UK Medical Research Council.