Donepezil has been shown to improve aspects of cognitive functioning in persons with Alzheimer's disease (AD), but its impact on instrumental activities of daily living has received little attention. In a within-subject design, 24 community-dwelling persons with AD were treated with open-label donepezil over a 12-month period. To assess functional abilities, a brief, objective measure of instrumental activities of daily living skills was used (Texas Functional Living Scale; TFLS). Global cognitive abilities were assessed with the Mini-Mental State Examination (MMSE). Changes in TFLS and MMSE scores were much the same. Improvements on the TFLS and MMSE were seen over a 3-month period. At 12 months, both TFLS and MMSE scores declined slightly below baseline. These results support an effect of donepezil on cognitive measures and day-to-day function and also suggest that the MMSE reflects well the actual functional ability of persons with moderate AD.