Background: Few data are available regarding the natural course of psychiatric symptoms in dementia with Lewy bodies and Alzheimer's disease. To acquire this information is essential to inform differential diagnosis and treatment decisions. Method: The current study provides prospective data regarding a representative case-register cohort of patients with operationalized clinical diagnoses of dementia with Lewy bodies (N = 82) or Alzheimer's disease (N = 132), with verified accuracy of clinical diagnosis against postmortem examination. Psychosis (Columbia University Scale for Psychopathology in Alzheimer's Disease) and depression (Cornell Scale for Depression in Dementia) were assessed at baseline and annual follow-up. Results: Visual hallucinations were significantly more likely to be persistent in patients suffering from dementia with Lewy bodies (χ2 = 19.1, df = 1, p < .0001). Although a number of other psychiatric symptoms were also more frequent at baseline in dementia with Lewy body patients, they were not significantly more likely to persist. Delusions and auditory hallucinations did, however, persist in more than 40% of patients across both diagnostic groups. Patients suffering from dementia with Lewy bodies were significantly more likely to develop new auditory hallucinations over the year of follow-up (χ2 = 14.4, df = 1, p < .0001). Conclusion: These results confirm that, although a number of psychiatric symptoms are common in dementia with Lewy bodies, it is only visual hallucinations that are significantly more persistent, with important treatment implications.