Background Over half of the older adults living with dementia have behavioral and psychological symptoms of dementia (BPSD), including sleep disturbance; however, little is known about physiological markers. Salivary cortisol and melatonin have been identified as potential biomarkers of BPSD, with evidence suggesting a relationship between these biomarkers and various behavioral factors, as well as sleep and activity patterns. Objectives The aim of this study was to investigate the time-dependent changes in salivary cortisol and melatonin levels in older adults with dementia, their relationship with the sleep–wake cycle, and their correlation with BPSD symptoms and behavioral factors. Methods This observational study conducted in Seoul and Gyeonggi-do, South Korea, used data from 172 older adults with dementia, measuring sleep and activity patterns for 2 weeks using a wearable device, in addition to administering questionnaires for neuropsychiatric and psychological symptoms—the Neuropsychiatric Inventory, Cohen–Mansfield Agitation Inventory, and Cornell Scale for Depression in Dementia. Salivary cortisol and melatonin levels were measured at four time points and divided into four groups based on a dual-trajectory model. Differences among the groups were analyzed using one-way analysis of variance. Results The participants showed normal but heterogeneous patterns of salivary cortisol and melatonin levels. Dual-trajectory pattern analysis showed that higher levels of melatonin during the daytime were correlated with poor nighttime sleep efficiency and decreased disinhibited behaviors, and higher levels of cortisol at all four time points were associated with decreased physical activity. Discussion Measuring and analyzing periodic changes in cortisol and melatonin levels can predict various behavioral symptoms (e.g., sleep disturbances, activity counts, and disinhibition) in older adults with dementia. A study with an experimental design is needed to discover the direct physiological interactions between cortisol, melatonin, and these symptoms.