Poststroke cognitive impairment and dementia (PSCID) is a major source of morbidity and mortality after stroke worldwide. PSCID occurs as a consequence of ischemic stroke, intracerebral hemorrhage, or subarachnoid hemorrhage. Cognitive impairment and dementia manifesting after a clinical stroke is categorized as vascular even in people with comorbid neurodegenerative pathology, which is common in elderly individuals and can contribute to the clinical expression of PSCID. Manifestations of cerebral small vessel disease, such as covert brain infarcts, white matter lesions, microbleeds, and cortical microinfarcts, are also common in patients with stroke and likewise contribute to cognitive outcomes. Although studies of PSCID historically varied in the approach to timing and methods of diagnosis, most of them demonstrate that older age, lower educational status, socioeconomic disparities, premorbid cognitive or functional decline, life-course exposure to vascular risk factors, and a history of prior stroke increase risk of PSCID. Stroke characteristics, in particular stroke severity, lesion volume, lesion location, multiplicity and recurrence, also influence PSCID risk. Understanding the complex interaction between an acute stroke event and preexisting brain pathology remains a priority and will be critical for developing strategies for personalized prediction, prevention, targeted interventions, and rehabilitation. Current challenges in the field relate to a lack of harmonization of definition and classification of PSCID, timing of diagnosis, approaches to neurocognitive assessment, and duration of follow-up after stroke. However, evolving knowledge on pathophysiology, neuroimaging, and biomarkers offers potential for clinical applications and may inform clinical trials. Preventing stroke and PSCID remains a cornerstone of any strategy to achieve optimal brain health. We summarize recent developments in the field and discuss future directions closing with a call for action to systematically include cognitive outcome assessment into any clinical studies of poststroke outcome.