EEG spectral analysis allows a quantitative analysis of changes in the frequency bands during disease progression in Alzheimer's disease (AD) and could be used to monitor treatment and disease progression. Eighteen patients with probable AD were evaluated by Folstein Mini Mental State Examination (MMSE) and EEG spectral analysis before donepezil treatment, 2 months after 5 mg/day and 4 months after the dose was raised to 10 mg/day. EEG evaluations were done in 4 derivations (T3-T5, T4-T6, C3-P3, C4-P4). Six months after treatment there was a significant reduction in the temporal delta amplitudes and an increase in the amplitudes of all the other frequency ranges including theta amplitudes both in the temporal and centroparietal derivations. MMSE scores increased during treatment but the change was not significant. These findings show that donepezil exerts a positive effect on EEG in AD by decreasing delta activity and increasing alpha and beta activity. The increase in theta activity after treatment may reflect a therapeutic shift of delta activity to theta activity.