OBJECTIVES: To examine the association between neuropsychiatric symptoms and risk of institutionalization and death. DESIGN: Analysis of longitudinal data. SETTING: The Aging, Demographics, and Memory Study (ADAMS). PARTICIPANTS: Five hundred thirty-seven adults aged 71 and older with cognitive impairment drawn from the Health and Retirement Study (HRS). MEASUREMENTS: Neuropsychiatric symptoms (delusions, hallucinations, agitation, depression, apathy, elation, anxiety, disinhibition, irritation, and aberrant motor behaviors) and caregiver distress were identified using the Neuropsychiatric Inventory. A consensus panel in the ADAMS assigned cognitive category. Date of nursing home placement and information on death, functional limitations, medical comorbidity, and sociodemographic characteristics were obtained from the HRS and ADAMS. RESULTS: Overall, the presence of one or more neuropsychiatric symptoms was not associated with a significantly higher risk for institutionalization or death during the 5-year study period, although when assessing each symptom individually, depression, delusions, and agitation were each associated with a significantly higher risk of institutionalization (hazard rate (HR)=3.06, 95% confidence interval (CI)=1.09?8.59 for depression; HR=5.74, 95% CI=1.94?16.96 for clinically significant delusions; HR=4.70, 95% CI=1.07?20.70 for clinically significant agitation). Caregiver distress mediated the association between delusions and agitation and institutionalization. Depression and hallucinations were associated with significantly higher mortality (HR=1.56, 95% CI=1.08?2.26 for depression; HR=2.59, 95% CI=1.09?6.16 for clinically significant hallucinations). CONCLUSION: Some, but not all, neuropsychiatric symptoms are associated with a higher risk of institutionalization and death in people with cognitive impairment, and caregiver distress also influences institutionalization. Interventions that better target and treat depression, delusions, agitation, and hallucinations, as well as caregiver distress, may help delay or prevent these negative clinical outcomes.