Background: The results of studies of the association between awareness and clinical correlates in patients with dementia are inconclusive. The aims of this study were to investigate whether awareness changed during the course of dementia and to determine whether awareness was associated with certain behavioral symptoms. Specifically, it was hypothesized that relatively intact awareness was related to affective disorders. Methods: One hundred and ninety-nine patients with dementia were included in a prospective 18-month follow-up study. Behavioral problems were assessed with the Neuropsychiatric Inventory and the Cornell Scale for Depression in Dementia. Awareness was assessed by means of the Guidelines for the Rating of Awareness Deficits. Results: Cross-sectional analyses showed awareness to be positively associated with age, gender, education and socioeconomic status, and negatively associated with psychosis, apathy, and overall behavioral disorders at baseline. After I year, a higher level of awareness was related to depression and anxiety. The level of awareness at baseline also predicted depression and anxiety after 1 year. Awareness decreased during the study. Conclusions: A higher level of awareness is associated with subsyndromal depression and anxiety whereas lack of awareness is associated with psychosis and apathy. The level of awareness decreases as dementia progresses. Clinicians should be more alert to changes in awareness in patients with dementia because psychosocial support might help to prevent the development of affective symptoms.