Determining the genetic architecture of late onset Alzheimer's disease remains an important research objective. One approach to the identification of novel genetic variants contributing to the disease is the classification of biologically meaningful subgroups within the larger late-onset Alzheimer's disease phenotype. The occurrence of psychotic symptoms in patients with late-onset Alzheimer's disease may identify one such group. We attempted to establish methods for the reliable assessment of psychotic symptoms in a large, geographically dispersed collection of families, multiply affected with late onset Alzheimer's disease, who were participants in the larger National Institute on Aging Late Onset Alzheimer's Disease Family Study; and to characterize the correlates and familial aggregation of psychosis within this cohort. We found that reliable assessments of psychotic symptoms during in-person or phone interviews were readily implemented. The presence of psychosis in late onset Alzheimer's disease was significantly associated with degree of cognitive impairment, and significantly, albeit modestly, correlated with the severity of other behavioural symptoms. Psychosis significantly aggregated within late onset Alzheimer's disease families suggesting that it may identify a genetically determined subgroup. Future studies should examine the linkage and association of psychosis with genetic variation within these families.