To determine how accurately dementia was diagnosed among medical inpatients, we compared the judgments of medical interns with diagnoses based on standard criteria. Fifty-seven interns rendered opinions regarding the presence of dementia in 380 medical inpatients who were simultaneously examined by physician-investigators applying criteria derived from DSM III. The sensitivity and specificity of diagnosis by interns were 79% and 80%, respectively. Patients who were misdiagnosed as demented were less likely to be high school graduates than their correctly classified nondemented counterparts, and those with unrecognized dementia were more likely to be younger than 65 years than patients whose dementia was recognized by house staff. It is concluded that misdiagnosis is related to age and educational status and that attention to these factors may improve diagnostic accuracy.