OBJECTIVES:  To determine the contribution of behavioural symptoms to the costs associated with caring for patients with dementia.  METHODS:  Data from the Canadian Outcomes Study in Dementia (COSID), a 3-year prospective study of community-dwelling dementia patients was examined.  Cognition was assessed with the Mini-Mental State Examination (MMSE) and behaviour with the Neuropsychiatry Inventory (NPI).  Resource utilization was evaluated monthly with caregiver-completed resource use (RU) questionnaires, which included frequency of community resource use (e.g., home care nurses, Meals-on-Wheels, etc.), hospitalization and respite care, outpatient visits and drug use (direct costs), as well as questions about time away from work or leisure activities for both patient and caregiver (indirect costs).  Costs were calculated in 2000 Canadian dollars.  RESULTS:  500 dementia patients and their caregivers who provided a minimum of 6 of 12 completed RU questionnaires were included in this 1-year preliminary analysis. At baseline, average age of patients was 76.3 (± 6.3), 47% were male, and 82% were diagnosed with AD. Average MMSE was 22.4 (± 4.5) and average NPI 8.8 (± 11.1; range 0-69). Total costs were estimated at $1298 per month ($113 for medication costs, $237 for other direct costs, and $948 for indirect costs). An analysis of covariance model, that included NPI, MMSE, gender, age, marital status, dementia diagnosis, type of residence, region of Canada, and number of medical co-morbidities, showed that greater cognitive impairment, i.e., lower MMSE (F=12.77, p<0.0004), female gender (F=9.31, p=0.0024) and non-AD dementia diagnosis (F=6.27, p=0.0126) were significant covariates. After accounting for the covariates, there was a significant association between cost and NPI (F=22.46, p<0.0001). The incremental cost of a one-point increase in NPI score was $32 per month (95% CI $18 - $45).  CONCLUSIONS:  Behavioural and psychological symptoms of dementia (BPSD) contribute significantly to the total costs of caring for community dwelling dementia patients.