Inclusion Criteria:

• Fluent in English or Spanish.
• Presence of dementia as defined by the Diagnostic and Statistical Manual of Psychiatry, 4th ed. (DSM-IV) American Psychiatric Association. 1994.
• Meets NINDS/ADRDA diagnostic criteria for probable Alzheimer's disease [AD] or Consortium diagnostic criteria for probable dementia with Lewy bodies [DLB] or diagnostic criteria for Parkinson's disease with dementia [PDD].
• Presence of psychosis and/or agitation that interferes with daily activities: a) psychosis, b) hallucination, c) delusion, or d) agitation.
• Presence of 2 or more of the following extrapyramidal motor features: a) resting tremor, b) bradykinesia, c) limb rigidity, d) shuffling, short-stepped gait.
• Sum of ratings for the resting tremor, bradykinesia, rigidity and gait items of the Unified Parkinson's Disease Rating Scale (UPDRS) motor examination component must be greater than or equal to 2.
• Brief Psychiatric Rating Scale (BPRS) score greater than or equal to 12.
• Informed consent by participant or an appropriate proxy.
• Spouse/caregiver who is willing and able to accompany the subject to all clinic visits.
• A stable dosage of non-excluded medications for at least 2 weeks prior to the Screening Visit.
• Is in a stable medical condition for at least 4 weeks prior to the Screening Visit.
• Physically acceptable for this study as confirmed by medical history, physical exam and clinical laboratory tests.
• Must be able to ingest oral medications.
• Supervision must be available for administration of study medication.
• Taking any marketed cholinesterase inhibitor (donepezil [Aricept], rivastigmine [Exelon], galantamine [Reminyl], tacrine [Cognex], and/or memantine at a dose unchanged for at least 2 weeks prior to the screening visit.
• Participants may reside in their own home or in a supervised care setting, such as a nursing home.

Exclusion Criteria:

• Mini Mental Status Examination Score <8.
• Use of any of the following in the 3 weeks prior to the screening visit: (a) a neuroleptic or atypical antipsychotic medication; or (b) an anticholinergic drug, amantadine for the treatment of parkinsonism [treatment with levodopa (Sinemet, Sinemet CR) and any dopamine agonist, selegiline or entacapone is allowed].
• A history of a severe adverse reaction to any antipsychotic medication.
• A serious medical illness that would preclude the safe administration of quetiapine, including active cancer. Skin tumors other than malignant melanoma are not exclusionary. Patients with stable prostate cancer may be included at the discretion of the Program Director.
• Current evidence or history in the last 2 years of epilepsy, focal brain lesion, head injury with loss of consciousness and/or immediate confusion after the injury.
• Known pregnancy.

Excluded Medications During the Study:

• Any classical neuroleptic antipsychotic, such as haloperidol (Haldol).
• Any atypical antipsychotic, such as risperidone (Risperidal), quetiapine (Seroquel), ziprasidone (Geodon), olanzapine (Zyprexa) and clozapine (Clozaril).
• Any anxiolytic other than lorazepam (Ativan), as described above. This includes clonazepam (Klonopin), diazepam (Valium), oxazepam (Serax), clorazepate (Tranxene), buspirone (Buspar) and hydroxyzine (Vistaril).
• Any hypnotic other than lorazepam (Ativan), as described above. This includes estazolam (Prosom), flurazepam (Dalmane), quazepam (Doral), temazepam (Restoril), triazolam (Halcion), diphenhydramine (Benadryl), doxylamine (Unisom), zolpidem (Ambien), zaleplon (Sonata) and chloral hydrate.