This study compares formal and informal caregivers' perceptions of delusions and hallucinations in older persons with dementia (PWDs). The study population consisted of 151 community-dwelling PWDs aged 65 and older, 90 formal caregivers, and 151 informal caregivers residing in Israel. Assessments included the Behavioral Pathology in Alzheimer's Disease Rating Scale, Neuropsychiatric Inventory, Etiological Assessment of Psychotic Symptoms in Dementia, Activities of Daily Living, and Mini-Mental State Examination. Informal caregivers reported higher rates and a higher level of severity of delusions and hallucinations than formal caregivers. Different caregivers showed varying degrees of emotional involvement, empathy, and efforts to find the meaning of the delusion for the person experiencing it. Family members and staff members may see different parts of the total picture. The combination of both points of view is essential in order to establish an accurate, comprehensive assessment of dementia symptoms and to enhance the understanding of the reality of the different parties.