This study aims to characterize the factors determining the retention or loss of insight in dementia through: (i) a comparison of assessment procedures previously used to quantify loss of insight and (ii) a qualitative analysis of interviews with patients and carers. Semi-structured interviews were carried out with thirty-two people with dementia and their carers, which incorporated assessments via clinical interview, discrepancy ratings between patient and carer on an Activities of Daily Living scale, and prediction of performance on a memory task. The results of these were compared and supplemented with themes arising from qualitative analysis of the interviews. Significant differences were found between insight as measured by a prediction of performance paradigm and other methods of assessment. This may reflect a distinction between implicit and explicit knowledge. Analysis of interviews identified the following factors as contributing to people's awareness of their difficulties: (1) short-term frustration or distress; (2) continuous discontent; (3) lack of concern; (4) normalization of problems; (5) worry and anxiety; (6) defensiveness; (7) explicit denial; and (8) priority given to other problems. We conclude that insight in dementia is a complex, multi-dimensional, and value-laden concept. Emotional and behavioural aspects need to be considered as well as the cognitive, which is emphasized by traditional methods of assessment based on quantitative ratings. Implicit awareness may be accessible through subjects' predictions of performance on cognitive tasks and should be further investigated. An adequate account of insight in dementia should incorporate both objective and subjective measures in order to determine the interrelationships between organic changes, personality factors, and psychological mechanisms. A generally accepted, reliable protocol for the assessment of insight needs to be developed.