OBJECTIVE: To study the impact of cognitive impairment and severity of dementia on the quality of life (QoL) of patients and their caregivers. DESIGN: Descriptive cross-sectional study within the NAtional Dementia Economic Study. SETTING: 231 general practices and 15 specialist clinics in Belgium. SUBJECTS: 605 patients aged > or = 65 years: 106 referent subjects without cognitive impairment (R), 113 subjects with cognitive impairment and no dementia (CIND), 386 subjects with mild (83), mild/moderate (108), moderate (62) or severe (133) dementia (D1 to D4). OUTCOME MEASURES: QoL of patients: COOP/WONCA charts, Katz's Activities of Daily Living (ADL) scale, Lawton's Instrumental Activities of Daily Living (IADL) scale. QoL of caregivers: COOP/WONCA charts, SF-36 questionnaire, short-form Beck Depression Inventory, Sense of Competence questionnaire (SCQ). MAIN RESULTS: QoL of patients: For R, CIND and D1 to D4 patients, dependence for ADL reached 5%, 6%, 16%, 20%, 48% and 79%, respectively, and mean IADL scores were 5.6, 5.0, 3.4, 2.0, 0.6 and 0.1, respectively. QoL of caregivers: The main impact of caregiving was on mental health, with SF-36 MCS scores of 51.3, 47.7 and 45.4 for R, CIND and all D patients and respectively 32.6%, 31.3% and 42.5% depression prevalence. Sense of competence decreased with severity of patient's cognitive impairment. Caregivers of CIND patients always rated intermediate between R and D1 patients. Caregivers of D3 patients were the most affected ones. CONCLUSION: The data suggest that improving the cognitive status of patients and providing assistance to caregivers would be complementary ways of action to support caregiving of patients living at home