Sleep disorders are among the most common clinical problems and possess a significant concern for the geriatric population. More importantly, while around 40% of elderly adults have sleep-related complaints, sleep disorders are more frequently associated with co-morbidities including age-related neurodegenerative diseases and mild cognitive impairment. Recently, increasing evidence has indicated that disturbed sleep may not only serve as the consequence of brain atrophy, but also contribute to the pathogenesis of dementia and, therefore, significantly increase dementia risk. Since the current therapeutic interventions lack efficacies to prevent, delay or reverse the pathological progress of dementia, a better understanding of underlying mechanisms by which sleep disorders interact with the pathogenesis of dementia will provide possible targets for the prevention and treatment of dementia. In this review, we briefly describe the physiological roles of sleep in learning/memory, and specifically update the recent research evidence demonstrating the association between sleep disorders and dementia. Plausible mechanisms are further discussed. Moreover, we also evaluate the possibility of sleep therapy as a potential intervention for dementia.