OBJECTIVE: This study aimed to characterize patients with paraphrenia, focusing on their risk of dementia compared to patients with schizophrenia and the general population. Additionally, the study examined the risk of psychiatric disorders among the offspring of patients with paraphrenia. METHODS: We conducted a nationwide cohort study using the Danish Civil Registration System, the Danish Psychiatric Central Research Register, and the Danish National Patient Registry. Patients diagnosed with paraphrenia from 1969 to 1993 (ICD-8 code 297.19) were identified and matched with schizophrenia and an age matched reference population. Dementia risk was assessed using Cox proportional hazard models, with age as the underlying timescale. Offspring of the populations were followed for psychiatric outcomes. RESULTS: Patients with paraphrenia (n = 989) were predominantly older women, more often unmarried or widowed. Patients with schizophrenia and individuals in the matched reference population had a lower risk of dementia compared to patients with paraphrenia (hazard ratio [HR] = 0.60 (95% confidence interval [CI] = 0.50-0.71) and HR = 0.22 (95% CI = 0.19-0.26, respectively). Offspring of patients with paraphrenia (n = 174) exhibited a higher risk of psychiatric illness than offspring of individuals in the reference population. There was no significant difference between the risk of psychiatric illness in offspring of patients with paraphrenia and patients with schizophrenia. CONCLUSION: The increased dementia risk associated with paraphrenia is contrary to the traditional description of it and may be due to earlier perhaps age based overdiagnosis of the syndrome including less characteristic clinical presentations. The increased familiar risk of psychiatric illness in offspring underscores the importance of considering familial psychiatric history in the assessment and care of these patients.