Psychotic symptoms presenting in late life can offer a diagnostic challenge to the clinician. In this study, 140 geriatric outpatients were prospectively examined for psychotic symptoms and assessed on a number of demographic and clinical variables. Cognition was assessed using the Mini-Mental State Exam. Psychiatric diagnoses were made by DSM-III-R criteria. Twenty-seven per cent (N = 38) had psychotic symptoms, delusions being the most common type. Patients with psychosis were significantly more likely to have a previous history of psychosis, to have a lower MMSE and to live in a nursing home. Four diagnoses accounted for 79.5% of all psychotic patients. In order of frequency. these were dementia, major depression, delirium and organic psychosis (organic hallucinosis, organic delusional disorder). Psychotic patients were significantly more likely to have a diagnosis of dementia, delirium or organic psychosis than non-psychotics, but depression was significantly more likely to occur in patients without psychosis, Although psychotic symptoms occur in a variety of illnesses, elderly patients with psychosis should be carefully evaluated for these disorders. (C) 1999 John Wiley & Sons, Ltd.