<b><i>Background/Aims:</i></b> To examine the association between self-reported sleep problems and incidence of dementia in community-dwelling elderly people. <b><i>Methods:</i></b> 1,041 nondemented participants over 65 years old were examined longitudinally. Sleep problems were estimated using the RAND Medical Outcomes Study Sleep Scale examining sleep disturbance, snoring, sleep short of breath or with a headache, sleep adequacy, and sleep somnolence. Cox regression analysis was used to examine the association between sleep problems and risk for incident dementia. Age, gender, education, ethnicity, <i>APOE</i>-ε4, stroke, heart disease, hypertension, diabetes, and depression were included as covariates. <b><i>Results:</i></b> Over 3 years of follow-up, 966 (92.8%) participants remained nondemented, while 78 (7.2%) developed dementia. In unadjusted models, sleep inadequacy (‘Get the amount of sleep you need') at the initial visit was associated with increased risk of incident dementia (HR = 1.20; 95% CI 1.02-1.42; p = 0.027). Adjusting for all the covariates, increased risk of incident dementia was still associated with sleep inadequacy (HR = 1.20; 95% CI 1.01-1.42; p = 0.040), as well as with increased daytime sleepiness (‘Have trouble staying awake during the day') (HR = 1.24; 95% CI 1.00-1.54; p = 0.047). <b><i>Conclusion:</i></b> Our results suggest that sleep inadequacy and increased daytime sleepiness are risk factors for dementia in older adults, independent of demographic and clinical factors.