This 5-wk, open-label, comparative study investigated the effects of quetiapine and haloperidol on behavioural, cognitive and circadian rest–activity cycle disturbances in patients with Alzheimer's disease (AD). Out of a total of 30 patients enrolled in the study, there were 22 completers, 11 in the quetiapine group (mean age 81.9±1.8 yr, mean baseline MMSE 19.9±1.3, mean dose 125 mg) and 11 in the haloperidol group (mean age 82.3±2.5 yr, mean baseline MMSE 18.1±1.3, mean dose 1.9 mg). As shown in the Neuropsychiatric Inventory, both medications reduced delusion and agitation, whereas quetiapine additionally improved depression and anxiety. Haloperidol worsened aberrant motor behaviour and caused extrapyramidal symptoms. In the Consortium to Establish a Registry for Alzheimer's Disease (CERAD) neuropsychological test battery which assessed cognitive parameters, quetiapine improved word recall; significant interaction terms revealed differences between quetiapine and haloperidol in word-list memory and constructional praxis. According to the Nurses' Observation Scale for Geriatric Patients (NOSGER) quetiapine improved instrumental activities of daily living. Actimetry documented the circadian rest–activity cycle before and after treatment. Sleep analysis revealed that patients receiving quetiapine had shorter wake bouts during the night, whereas patients receiving haloperidol had fewer though longer immobile phases. The study provides evidence that quetiapine at a moderate dose may be efficacious in treating behavioural disturbances in AD, with better tolerability than haloperidol.