The prevalence of vitamin B12 deficiency increases with age. Patients with dementia and spouses of patients with dementia are at special risk for the development of vitamin B12 deficiency. In a normal diet this vitamin is present only in animal source foods; therefore, vegans frequently develop vitamin B12 deficiency if not using supplements or foods fortified with cobalamin. Apart from dementia, most of these manifestations are completely reversible under correct therapy; therefore it is crucial to identify and to treat even atypical presentations of vitamin B12 deficiency as early as possible. This article deals with the physiology and pathophysiology of vitamin B12 metabolism. A practice-oriented algorithm which also considers health economic aspects for a rational laboratory diagnosis of vitamin B12 deficiency is presented. In cases with severe neurological symptoms, therapy should be parenteral, especially initially. For parenteral treatment, hydroxocobalamin is the drug of choice.