Decline in cognitive function, especially memory, is the core feature of Alzheimer's disease (AD). However, other characteristic aspects of the disease are also important. These include patients' activities of daily living (ADL), including quality of sleep, behavioural disturbances and the impact of the disease on the caregiver. Therefore, increasing attention is being paid to clinically meaningful outcome measures, such as the Disability Assessment for Dementia (DAD) scale, the Neuropsychiatric Inventory (NPI), caregiver time and the Pittsburgh Sleep Quality Index (PSQI). Galantamine is a new treatment for AD that combines modulation of nicotinic receptors with inhibition of acetylcholinesterase. The present review outlines the positive and sustained effects of this agent on patients' behaviour and daily functioning as well as on caregiver time. In studies of up to 5 months' duration, galantamine-treated patients had a significantly better outcome on ADL than placebo-treated patients, and after 12 months of treatment with galantamine, patients' functional ability was preserved. Galantamine also significantly benefits behavioural disturbances in patients with AD. These functional and behavioural benefits are associated with a decrease in the burden on caregivers, as indicated by a reduction, relative to placebo, in the time spent supervising and assisting patients. These clinical benefits are not offset by disruption of patients' sleep, as has been reported with other cholinergic treatments.