OBJECTIVES: To analyze prescription patterns and drug costs in German patients with dementia in home care settings and nursing homes. METHODS: The present study included 41,064 patients treated in general practices (GPs) and 20,649 patients treated in psychiatric practices (PPs) who were diagnosed with dementia in 2014. Four different types of antidementia therapy were included in the analysis. The shares of dementia patients, including treatments and their associated costs, in home care settings and nursing homes were estimated. Regression analyses were performed to study the impact of the type of residence on the likelihood of receiving a defined therapy and incurring its associated cost. RESULTS: Antidementives were more frequently prescribed to patients in home care settings, whereas antidepressants, antipsychotics, and benzodiazepines were more commonly administered to nursing home patients in both the GP and the PP groups. Individuals residing in nursing homes had a lower likelihood of receiving antidementives but exhibited a higher likelihood of being prescribed antidepressants, antipsychotics, and benzodiazepines. The total cost of therapy was higher in nursing homes than in home care settings (GPs: difference of €27.20; PPs: difference of €107.90). The cost of antidementives was significantly lower in GP patients residing in nursing homes than in GP patients living at home. There was no significant difference in the cost of antidementives in the PP groups. By contrast, the costs of the three other families of drugs were lower in individuals cared for at home than in individuals residing in nursing homes in both practice types. CONCLUSIONS: Prescription patterns and the drug costs in dementia patients significantly differed between home care settings and nursing home settings.