BACKGROUND: The objective was to identify separate cognitive domains in the standard assessment tools (MMSE, ADAS-Cog) and analyze the process of decline within domains during three years in Alzheimer's disease (AD) patients with donepezil treatment. METHOD: AD patients (n = 421) were recruited from a clinical multi-centre study program in Sweden. Patients were assessed every six months during three years. All patients received donepezil starting directly after study entry. After dropouts, 158 patients remained for analyses over three years. Data for the other patients were analysed until they dropped out (4 groups based on length in study). RESULTS: Factor analyses of all items suggested that there were three intercorrelated factors: a General, a Memory and a Spatial factor for which we constructed corresponding domains. Overall there was a cognitive improvement at six months followed by a linear drop over time for the three domains. Some group and domain differences were identified. Patients who remained longer in the study had better initial performance and a slower deterioration rate. The early dropouts showed no improvement at six months and many dropped out due to side effects. The other groups displayed a performance improvement at six months that was less pronounced in the Memory domain. Before dropping out, deterioration accelerated, particularly in the Spatial domain. CONCLUSION: The course of illness in the three domains was heterogeneous among the patients. We were not able to identify any clinically relevant correlates of this heterogeneity. As an aid we constructed three algorithms corresponding to the cognitive domains, which can be used to characterize patients initially, identify rapid decliners and follow the course of the disease.