This study investigated the meanings and etiologies of hallucinations in persons with dementia. Participants were 74 nursing home residents aged ≥65 diagnosed with dementia. Most of the reported visual and auditory hallucinations involved talking to persons who are not present, a phenomenon described as either a visual or auditory hallucination, or both. All participants who were reported to experience a hallucination had poor vision. Current results suggest that hallucination was a term staff caregivers used for the phenomena they could not easily explain, demonstrating their lack of understanding of the resident and/or the phenomena they termed hallucination. The classification of hallucinations into subtypes may not be meaningful, and most visual and auditory hallucinations were not associated with negative affect. Some hallucinations occurred out of boredom, which exacerbated the sensory deprivation experienced by these persons, thereby increasing the likelihood of hallucinations.