OBJECTIVES: To examine the association between hormone therapy (HT) and cognitive performance or dementia, focusing on the duration and type of treatment used, as well as the timing of initiation of HT in relation to the menopause. METHODS: Women 65 years and older were recruited in France as part of the Three City Study. At baseline and 2- and 4-year follow-up, women were administered a short cognitive test battery and a clinical diagnosis of dementia was made. Detailed information was also gathered relating to current and past HT use. Analysis was adjusted for a number of sociodemographic, behavioral, physical, and mental health variables, as well as APOE epsilon4. RESULTS: Among 3,130 naturally postmenopausal women, current HT users performed significantly better than never users on verbal fluency, working memory, and psychomotor speed. These associations varied according to the type of treatment and a longer duration of HT appeared to be more beneficial. However, initiation of HT close to the menopause was not associated with better cognition. HT did not significantly reduce dementia risk over 4 years but current treatment diminished the negative effect associated with APOE epsilon4. CONCLUSIONS: Current hormone therapy (HT) was associated with better performance in certain cognitive domains but these associations are dependent on the duration and type of treatment used. We found no evidence that HT needs to be initiated close to the menopause to have a beneficial effect on cognitive function in later life. Current HT may decrease the risk of dementia associated with the APOE epsilon4 allele.