Dementia is a clinical syndrome with abnormal degree of memory loss and impaired ability to recall events from the past often characterized by Alzheimer's disease. The various strategies to treat dementia need validation of novel compounds in suitable animal models for testing their safety and efficacy. These may include novel anti-amnesic drugs derived from synthetic chemistry or those derived from traditional herbal sources. Multiple approaches have been adopted to create reliable animal models ranging from rodents to non-human primates, where the animals are exposed to a predetermined injury or causing genetic ablation across specific regions of brain suspected to affect learning functions. In this review various animal models for Alzheimer's disease and treatment strategies in development of anti dementia drugs are discussed and an attempt has been made to provide a comprehensive report of the latest developments in the field.