OBJECTIVES: Antihistamines with anticholinergic properties (AA) are often used to treat comorbidities in patients with dementia. Use of AA with cholinesterase inhibitors (CHI) may counteract benefits of CHI in improving activities of daily living (ADL) or slowing ADL decline. Associations between use of AA with CHI and ADL function were assessed. METHODS: A retrospective cohort analysis of Indiana Medicaid claims and enrollment data from July 2001 through December 2005 merged with Minimum Data Set (MDS) identified persons ≥ 65 years, with dementia based on previously assessed criteria for identifying dementia and, receiving CHI. Persons taking anticholinergics other than AA during the study interval from first to last MDS assessment during CHI use were excluded. Piecewise repeated measures analysis used days taking AA and days not taking AA during each assessment interval as predictors to estimate influence of AA use on MDS ADL function scores (range 0-28, higher scores=more dependence). Presence of shifts in curves and changes in slopes defined changes in ADL. Age, gender, race, region, marital status and number of medications taken at the start of CHI use, Charlson comorbidity score and propensity score for receipt of AA were included as fixed covariates. RESULTS: A sample of 2,690 persons with mean age of 82 years, 75% female and, 90% white was identified. Of these, 691 (26%) used AA. Overall, a 0.45 (p=0.02) upward shift in ADL score indicated an immediate decrease in ADL function with AA use. Among persons with moderate ADL dependence (score 6-12), an increase in slope of 0.53 (p=0.04) per quarter also was observed indicating faster decline with AA use. CONCLUSIONS: Use of AA with CHI is associated with greater ADL decline in Medicaid recipients with dementia. Potential impact of AA use on physical function should be considered before prescribing AA with CHI.