Patients with neurodegenerative disease frequently experience hallucinations and illusionary perceptions. As early symptoms, hallucinations may even have diagnostic relevance (i.e., for the diagnosis of Lewy Body Dementia). In the later course of the disease, hallucinations may appear as characteristic symptoms and often constitute a particular challenge for therapeutic endeavors. Here, the distinction of disease-inherent hallucinations from medication-associated perceptual disturbances is particularly relevant. Synucleinopathies and tauopathies have different risk profiles for hallucinations. In synucleinopathies hallucinations are much more frequent and phenomenology is characterized by visual, short-lived hallucinations, with insight preserved for a long time. A “double hit” theory proposes that dysfunctionality of both associative visual areas and changes of limbic areas or the ventral striatum are required. In contrast, in tauopathies the hallucinations are more rare and mostly embedded in confusional states with agitation and with poorly defined or rapidly changing paranoia. The occurrence of hallucinations has even been proposed as an exclusion criterion for tauopathies with Parkinsonian features such as progressive supranuclear palsy. To date, treatment remains largely empirical, except the use of clozapine and cholinesterase inhibitors in synucleinopathies, which is evidence-based. The risk of increased neuroleptic sensitivity further restricts the treatment options in patients with Lewy Body Dementia. Coping Strategies and improvement of visual acuity and sleep quality may be useful therapeutic complements.