OBJECTIVE: Circadian rhythm disturbances, like sundowning, are seen in dementia. Because the circadian rhythm is regulated by the biological clock, melatonin might be effective in the treatment of these disturbances. We systematically studied the effect of melatonin treatment in patients with dementia. In addition, we elaborate on the possible effects one might expect of melatonin treatment in patients with delirium, since dementia and delirium are strongly related. Moreover, some evidence exists that sundowning in patients with dementia and the alterations in the sleep/wake cycle, seen in patients with delirium both originate from circadian rhythm disturbances. DESIGN: A systematic search of the literature, published between 1985 and April 2009, was performed using PubMed and other databases. All papers on melatonin treatment in dementia were retrieved. Effects of melatonin on circadian rhythm disturbances were scored by means of scoring sundowning/agitated behaviour, sleep quality and daytime functioning. RESULTS: Nine papers, including four randomised controlled trials (RCTs) (n = 243), and five case series (n = 87) were reviewed. Two of the RCTs found a significant improvement on sundowning/agitated behaviour. All five case series found an improvement. The results on sleep quality and daytime functioning were inconclusive. CONCLUSION: Sundowning/agitated behaviour improves with melatonin treatment in patients with dementia. There are several arguments that sundowning in patients with dementia and the alterations in the sleep/wake cycle in patients with delirium have a common background, namely a disturbance of the circadian rhythm. This suggests that melatonin treatment could also have the same positive effects in patients with delirium.