The apolipoprotein E (ApoE) epsilon4 allele is a well-documented genetic risk factor for sporadic Alzheimer's disease (AD). Its association with psychopathology among AD patients has been the subject of discrepant reports. We aimed to determine whether ApoE epsilon4+ and epsilon4- AD patients exhibit a different risk profile for psychotic symptoms and other behavioral disturbances. The Neuropsychiatric Inventory (NPI) was administered to determine the frequency and severity of psychotic and other behavioral symptoms in a sample of n=266 AD patients who had been genotyped for ApoE. Multiple logistic regression models were used to calculate the association between the ApoE epsilon4 allele and the presence of psychotic symptoms (delusions or hallucinations). Exploratory analyses were also conducted to determine the impact of disease severity on epsilon4 effects and to examine the association between epsilon4 and other behavioral symptoms. ApoE epsilon4 was significantly associated with psychotic symptoms (odds ratio (OR)=1.87, 95% CI=1.07-3.29, P=0.029), adjusting for age, sex, education, and MMSE score. More stringent definitions of clinically significant psychosis yielded similar results. Exploratory analyses suggested that this effect accrued specifically from patients with severe-stage AD and primarily from an association between epsilon4 and delusions. The epsilon4 allele did not appear to influence the development of most other behavioral symptoms in our sample. In conclusion, AD patients who carry the ApoE epsilon4 allele are at greater risk than noncarriers for developing psychotic symptoms, particularly as the severity of their dementia progresses.