A 3-year follow-up study of 1090 people aged 60 years or over in an urban area of Beijing, China, was conducted to determine the incidence of dementia and its characteristics of distribution. This cohort has been studied first in a cross-sectional survey of dementia in 1986. The follow-up examination employed the same interviewers, psychiatrists, instruments (Mini-Mental State Examination and the Crichton Royal Behavior Rating Scale) and diagnostic criteria for dementia (modified DSM-III) in 1989. The respondent rate in this study was 75.7%. The average annual incidence rate of moderate and severe dementia for greater than or equal to 60 years was 0.3% (95% confidence interval 0.08-0.52%). As expected, the rate increased sharply with aging. No sex difference was found. The prevalence rate of moderate and severe dementia was 1.10% among those aged greater than or equal to 65 years, similar to that (1.82%) in the first survey. Our results showed that the multi-infarct dementia was somewhat more common than primary degenerative dementia (ratio 3:2), both among incident cases and current prevalent ones. The average duration of dementia in the community was 8.0 years (SD 3.4). The risk for death in demented patients was 3 times higher than in the whole cohort (standardized mortality ratio = 2.95), and no specific cause of death was observed. In addition, our study showed that elderly people with less education, a history of consistent unemployment, limited physical activity and stroke history had a higher risk for developing dementia.