Hallucinations in Alzheimer's disease (AD) may indicate greater cortical cholinergic deficits. Rivastigmine has shown larger treatment benefits versus placebo in dementia with Lewy bodies and Parkinson's disease dementia patients with hallucinations. In this retrospective, hypothesis-generating analysis, we investigated whether hallucinations in AD were associated with greater treatment benefits with rivastigmine. Data were pooled from two randomized, double-blind, 6-month, mild-to-moderate AD trials comparing rivastigmine with placebo. Co-primary efficacy parameters were the Alzheimer Disease Assessment Scale-cognitive subscale (ADAS-cog) and Clinician's Interview-Based Impression of Change plus Caregiver Input (CIBIC-plus). Efficacy data were analyzed for two sub-populations: those with and those without hallucinations at baseline. Of 927 patients, 194 (21%) reported hallucinations at baseline. Hallucinators tended to have greater decline on placebo on all outcome measures. On the ADAS-cog, mean rivastigmine − placebo differences of 3.7 points in hallucinators and 2.2 points in non-hallucinators were reported at 6 months (both p < 0.001). In hallucinators, a significant rivastigmine − placebo difference of −1.0 points (a beneficial effect) was seen on the CIBIC-plus at 6 months (p < 0.001). Non-hallucinators showed a smaller significant treatment difference of −0.3 points (p < 0.05). Interaction testing suggested that differences in treatment effects were significant between hallucinators and non-hallucinators. Hallucinations predicted greater treatment responses to oral rivastigmine.