Depression is among the most common behavioral and psychological symptoms of dementia, and leads to more rapid decline and higher mortality. Treatment for depression in dementia has centered on conventional antidepressant drug treatment based around the monoamine hypothesis of depression. However, recent major studies have suggested that conventional antidepressant treatments that aim to correct underlying deficits in monoamine neurotransmitters are not effective for depression in dementia. Postmortem studies have also suggested that depression in dementia does not arise from serotonergic or noradrenergic abnormalities, or indeed from the degenerative pathology associated with Alzheimer's disease. In contrast, considerable recent evidence has suggested that alterations in glutamatergic transmission may contribute to the pathophysiology of depression. This supports the view that treatment-resistant depressed patients, such as many dementia patients, may benefit from agents affecting glutamate transmission. This review will thus draw together the wealth of pathological data examining the basis of depression in Alzheimer's disease and relate this to current thinking on treatment, with the aim of generating discussion on potential novel therapeutic strategies.