Awareness of disease can be compromised to some degree in a proportion of people with dementia, with evident differences across domains. We designed this study to determine the factors associated with the impairment of awareness over a period of time. Using a longitudinal design, 69 people with mild Alzheimer’s disease and their family caregivers completed the Assessment Scale of Psychosocial Impact of the Diagnosis of Dementia, the Quality of Life in Alzheimer’s Disease Scale, the Mini-Mental State Examination, the Clinical Dementia Rating Scale, the Cornell Scale for Depression in Dementia, the Pfeffer Functional Activities Questionnaire, the Neuropsychiatric Inventory, and the Zarit Burden Interview. Univariate and logistic regression analyses were conducted to examine the contribution of the various factors. The level of awareness of disease was significantly lower (p ≤ 0.001) between baseline and at follow up. At follow up, there was no change in the level of awareness of disease in 61.8%, whereas 25.4% worsened. However, the level of awareness improved in 12.3%. Logistic regression demonstrated that functional deficits (OR=1.12, 95% CI: (1.03–1.22), p≤0.01), and caregivers’ quality of life (OR = 0.83, 95% CI: (0.70–0.98), p ≤ 0.05) were a significant predictor of impaired awareness of disease. The results confirmed that awareness and cognition are relatively independent, and showed that in people with mild dementia, unawareness is mainly manifested by poor recognition of changes in the activities of daily living, and decrease in quality of life.