Recent concerns regarding the use of atypical antipsychotics when used for the treatment of neuropsychiatric symptoms in dementia have led to a flurry of studies attempting to re-evaluate their place in therapy. We critically review current evidence on the safety profiles of these agents in patients with behavioural and psychological symptoms of dementia (BPSD) and provide recommendations to guide the clinician. Potential risks with this class of medications include extrapyramidal symptoms (EPS), weight gain, diabetes mellitus, cardiac conduction abnormalities (e.g. corrected QT [QTc] interval prolongation), cerebrovascular adverse events and mortality. Compared with placebo, treatment of BPSD with atypical antipsychotics leads to little or no increase in EPS and no significant weight change. Compared with typical antipsychotics, treatment of BPSD with atypical antipsychotics leads to a reduced risk of EPS, lower incidences of tardive dyskinesias and no significant weight gain. Atypical antipsychotics have not been associated with glucose intolerance, diabetes or hyperlipidaemia in elderly dementia patients. Both typical and atypical antipsychotics have been associated with cardiac conduction abnormalities, with the magnitude of QTc prolongation being slightly smaller with atypical antipsychotics. Randomised controlled trials suggest that atypical antipsychotics are associated with an increased risk of cerebrovascular adverse events, such as stroke, and an increased mortality compared with placebo. However, it appears that typical antipsychotics have similar risks of cerebrovascular adverse events and death. An increased risk of anticholinergic adverse effects and falls must also be considered with both typical and atypical antipsychotics. In summary, atypical antipsychotics are associated with potentially serious adverse events. Before prescribing these medications in elderly dementia patients, baseline EPS, ECG abnormalities and concomitant medications should be assessed, and the presence of cardiovascular, cerebrovascular and metabolic risk factors should be taken into consideration when benefits and risks are being weighed.