Patients with Alzheimer's disease (AD) have pathologic involvement of several important components of the primary auditory pathway, including the inferior colliculus, medial geniculate body, primary auditory cortex, and secondary auditory cortex. The main components of the brainstem auditory evoked response (BAER) and middle latency response (MLR) reflect the function of portions of the primary auditory pathway, including those affected pathologically in AD. The amplitude of the P1 component of the MLR reflects the degree of neuronal activity of midbrain portions of the ascending reticular activating system (ARAS) with cortical cholinergic projections. To determine whether there is dysfunction of the primary auditory pathway and ARAS in AD, we compared simultaneous BAER and MLR component latency and amplitude measurements in patients with mild-moderate AD (n = 35) and age-matched healthy elderly controls (n = 34). There were significant latency delays in brainstem transmission time (BAER I-V interpeak latency; p < 0.05) and in primary auditory cortex evoked potential generation (MLR Pa latency; p < 0.05) in the AD group compared with controls. In addition, there was a significant reduction in the P1 component amplitude of the MLR in the AD group (p < 0.01). These results indicate dysfunction of the primary auditory pathway and ARAS in patients with mild-moderate AD and support the hypothesis that impairment of auditory function and of arousal are intrinsic features of AD.