OBJECTIVE To determine the frequency of cholinesterase inhibitor (ChEI) use in nursing home (NH) residents with dementia and examine correlates of ChEI use in this population. METHODS Cross-sectional study using the 2004 National Nursing Home Survey (NNHS). METHODS A representative, stratified, random sample of U.S. NHs. METHODS All NNHS participants aged 65 and older with a chart diagnosis of dementia. METHODS Bivariate analyses to compare characteristics of NH residents with dementia according to ChEIs status and multivariable logistic regression to identify independent correlates of ChEI use. RESULTS Almost half (49.1%) of NNHS participants had dementia, and 30.0% of those with dementia were receiving ChEIs. Donepezil accounted for 71% of all ChEI prescriptions. Multivariable logistic regression showed that ChEI use was independently associated with younger age (odds ratio (OR)=0.42, 95% confidence interval (CI)=0.28-0.64, aged > or =95 vs 65-74), less activity of daily living impairment (OR=0.49, 95% CI=0.42-0.58, severe vs mild impairment), greater use of antipsychotics (OR=1.33, 95% CI=1.16-1.54) and antidepressants (OR=1.38, 95% CI=1.20-1.59), and residence in NHs with more beds (OR=1.52, 95% CI=1.07-2.16, > or =200 beds vs <50 beds). CONCLUSIONS Approximately 30% of NH residents with dementia in U.S. NHs are treated with ChEIs. Functional impairment and medical comorbidity are common in ChEIs users, although users tend to be younger and less impaired than NH residents with dementia who are not receiving ChEIs. Further study is required to determine the optimum use of ChEI in NH populations.