The psychopharmacological treatment of schizophrenia and psychosis in older adults is challenging because of age-related pharmacokinetic and pharmacodynamic changes, comorbidities, concurrent medications, and increased potential for drug-drug and drug-disease interactions and adverse effects. The treatment of psychosis associated with dementia in the elderly is complicated by the lack of approved pharmacological agents, the potential for increased mortality and morbidity with antipsychotic agents, legal consequences of using antipsychotics for off-label indications, the US Food and Drug Administration (FDA) black box warnings for their use in dementia, and the state and federal regulations regarding their use in nursing homes. The psychopharmacological treatment of psychoses has evolved over the past couple of decades. Selection of appropriate medications based on the patient’s clinical profile, discussion and documentation of risks, benefits, and alternatives of treatment with patient and family, use of minimum required dose and gradual dose reductions as needed, and behavioral interventions will assist the physician in achieving an optimal outcome.