Disturbed sleep cycles are the principal cause of institutionalization in dementia, and therefore represent a major clinical problem. They may arise from dysfunction within the circadian clock of the hypothalamus that times and consolidates wakefulness, or from neuropathology in output pathways and/or target sites of the clock specifically controlling sleep and wakefulness. To determine the relationship of disturbed activity cycles to other circadian clock‐controlled rhythms, cross‐sectional and longitudinal actigraphy and serial sampling of saliva were used to compare the impact of early Alzheimer’s dementia on activity/rest and cortisol rhythms in home‐dwelling subjects. Mildly demented subjects had daily activity rhythms comparable to those of healthy age‐matched subjects. Moderately demented subjects exhibited a range of disturbances of the activity/rest cycle, with reduced stability, increased fragmentation and loss of amplitude. Within the moderately demented group, however, the degree of circadian disruption was not correlated with the individual severity of dementia. All groups of subjects, mild, moderate with normal activity cycles and moderate with abnormal activity cycles, exhibited robust daily profiles of salivary cortisol, with highest levels in the morning (08:00 h) and an evening nadir (20:00–24:00 h). Salivary cortisol levels tended to be higher in the moderately demented subjects in the afternoon, but this effect was not specific to those with abnormal activity/rest patterns. The actimetric data confirm that deterioration of activity/rest cycles is a common and progressive feature in home‐dwelling Alzheimer’s patients, occurring early in the disease but after the measurable onset of dementia. The maintenance of highly rhythmic daily cortisol profiles in association with disturbed activity profiles, both on an individual and on a group basis, demonstrates that loss of circadian control to activity/rest cycles is not a consequence of global circadian disruption in early dementia. Rather, pathology may develop in discrete elements of the circadian clockwork and/or its output systems that control activity/rest, sleep and wakefulness. Further characterization of this pathology will facilitate more effective management of sleep patterns in home‐dwelling demented patients.