Alzheimer's disease (AD) is characterized by deterioration in the ability to perform activities of daily living (ADL) in addition to loss of cognitive function and behavioral changes. This decline in day-to-day functioning is increasingly recognized as a source of considerable social, health, and economic costs. Inability to perform ADL results in growing caregiver burden and may lead to the eventual need for alternative care or nursing home placement. The measurement of ADL, which enables monitoring of the effectiveness of therapeutic interventions, can be performed using a number of inventories including the Progressive Deterioration Scale (PDS), the Disability Assessment for Dementia (DAD), and the Alzheimer Disease Cooperative Study ADL (ADCS/ADL) assessment scale. Clinical studies using these and other scales have indicated that cholinesterase (ChE) inhibitors offer an effective approach to treating the functional decline of AD. Donepezil, rivastigmine, and galantamine have been shown in some studies to prevent or slow decline in ADL over treatment periods of one to two years. For instance, in a 24-week study in subjects with moderate to severe AD, donepezil-treated patients remained stable compared with the placebo-treated patients. Rivastigmine has shown improvement or stabilization of PDS scores in patients with mild to moderate disease following 26 weeks of treatment and slowed deterioration in patients with more severe disease. Evidence to date suggests that these agents may not be equally effective at slowing or stabilizing loss in ADL over time and that these differences may reflect differences in pharmacology. In addition to inhibition of acetylcholinesterase (AChE), these compounds have other putative differences in mechanisms of action. Galantamine allosterically modulates the nicotinic receptor and may prevent the loss of ADL. Rivastigmine robustly inhibits butyrylcholinesterase in addition to AChE and therefore acts as a dual ChE inhibitor. Comparative studies evaluating the differential effects of these ChE inhibitors on ADL are awaited.