We examined whether either psychotic features (e.g., delusions and hallucinations) or EEG abnormalities are associated with more rapid progression of Alzheimer's disease (AD). AD patients with psychosis have exhibited more EEG abnormalities than those without psychosis, and both abnormal EEG and psychosis have been noted to be predictors of functional and cognitive decline in AD. Ninety-five probable AD patients participating in a longitudinal study of dementia had an EEG and a semistructured psychiatric interview at baseline. Using EEG spectral analysis, we classified records as normal/abnormal based on the parasagittal mean frequency. Patients with abnormal EEGs were more functionally (e.g., Blessed Rating Scale for activities of daily living) and cognitively (e.g., Mini-Mental State) impaired than patients with normal EEG. AD patients with psychosis were only more functionally impaired than patients without psychosis. A two-factor analysis showed no interaction between abnormal EEG and psychosis. In addition, using a Cox proportional hazard model adjusted for age and education, the presence of an abnormal EEG or psychotic symptom at study entry was associated with higher risk of reaching severe cognitive and functional impairment during follow-up. Neither abnormal EEG nor the presence of psychosis predicted death. These results indicate that both abnormal EEG and psychosis are independent predictors of disease progression but not of physical survival.