Background: Alzheimer's disease (AD) is associated with dependence in activities of daily living (ADL). In addition to the cognitive impairment resulting from AD, the presence of psychotic symptoms may further increase this dependence. The objective of this study was to quantify the additional contribution of psychotic symptoms to dependence in ADL. Method: We analyzed data from 558 individuals with AD referred to a memory clinic. Information on ADL, psychotic symptoms, depression symptoms, and cognition was collected with standardized instruments. Results: The frequency of psychotic symptoms was correlated with dependence in ADL (r = −.44, p < .001). The independent contribution of psychotic symptoms to ADL (basic and instrumental) after consideration for cognitive impairment and depression symptoms was assessed with hierarchical regression models. Twenty-five percent of basic ADL variance was explained by cognition; psychotic symptoms accounted for an additional 7% of the variance (b = −0.12, p < .001). Cognitive impairment explained 31% of instrumental ADL variance; psychotic symptoms accounted for an additional 6% (b = −0.21, p < .001). Discussion: Psychotic symptoms are associated with dependence in ADL after controlling for cognitive impairment and depression symptoms. Future research should investigate possible causal linkages between psychotic symptoms and dependence in ADL. This may have implications regarding interventions to maintain independent living in people with AD.