This article reviews the cholinergic changes in Parkinson's disease and dementia (PDD) and dementia with Lewy bodies (DLB), their potential clinical implications, and the available evidence for cholinesterase inhibitors in the treatment of PDD and DLB. Marked neuronal loss of cholinergic nuclei, reduced cholinergic markers in the neocortex, hippocampus, and selected thalamic nuclei, and receptor changes have been reported. One large and 2 small placebo-controlled trials and nearly 20 open-label studies suggest that cholinesterase inhibitors have a positive effect on cognition, psychiatric symptoms, and global function in patients with DLB and PDD. The treatment is well tolerated in most patients without any apparent worsening of extrapyramidal motor features. Given the high risk of severe sensitivity reactions and increased risk of cerebrovascular incidents during treatment with neuroleptics, more clinical trials of cholinesterase inhibitors are encouraged to establish their precise role in DLB and PDD.