One the most difficult challenges experienced by people with dementia and their caregivers is their communication. The ability to communicate is essential to creating and maintaining social relationships. Many individuals who suffer from dementia experience increased agitation and diminished social interaction in the long-term care living setting. This paper demonstrates how, through language, they construct social relationships. As part of The Friendship Study, which is an ethnographic observation of persons with dementia living in a long-term care setting, we analyzed transcripts from video- and audio-taped data and performed a discourse analysis of conversations to show how persons with dementia who live in a long-term care setting use language to create friendships. These analyses show that friendships are constructed using concepts such as conversational objects, discourse deixis, indexicality, and alignment among speakers.