Clinical electroencephalography is a relatively simple and inexpensive diagnostic tool with a high sensitivity for diffuse organic encephalopathy of various aetiologies but with a rather low specificity for the type of diagnosis. The highest sensitivity is shown in DAT and Parkinson dementia, and in these conditions the degree of EEG abnormality is correlated with the disease severity. Quantification of EEG makes these correlations more reliable and provides a method for monitoring therapeutic effects. Dementias with predominantly frontal pathology show much less EEG abnormality, and in these conditions the EEG is often normal despite obvious clinical dementia. Also, alcohol dementias often show normal EEG patterns. At an early stage of clinical evaluation, EEG may be useful in the discrimination of organic dementia from pseudodementia, because EEG is usually normal in depression, confusion, agitation and other psychiatric conditions. In pseudodementia due to intoxication with sedatives the EEG is usually dominated by diffuse beta activity. At the stage of differential diagnosis of an organic brain disorder, EEG cannot reliably discriminate between encephalopathies secondary to hydrocephalus, AIDS, cerebrovascular disease, B12 deficiency and primary degenerative diseases such as DAT. More specific EEG patterns are seen in acute cerebrovascular lesions, metabolic encephalopathies, i.e. of hepatic origin, Creutzfeldt-Jakob disease, herpes encephalitis, and nonconvulsive status epilepticus as possible causes of a rapidly deteriorating mental and neurological condition. Repeated EEG recordings over time would add significantly to the diagnostic information. New techniques such as topographical brain mapping, analysis of the EEG during REM sleep, coherence analysis of the EEG activity, and the combination of quantified EEG techniques with evoked potentials and event-related potentials will presumably add to the sensitivity as well as the specificity of the electrophysiological methods in the diagnosis of dementia.