<p>Previous studies found that 34–63% of patients with dementia suffer from psychotic symptoms, and previous theories suggest that patients with dementia are cognitively vulnerable and thus more at risk of psychosis, but few studies have explored potential psychosocial and health explanations for the dementia-psychosis link. This study aimed to investigate whether risk factors such as loneliness, low autonomy/control, poor physical health, anxiety, eyesight/hearing loss, and experiences of discrimination act as mediators or moderators of the dementia-psychosis link. This was an analysis of the data of 7,575 adults aged 50 years old or over who took part in the 2021–2023 wave of the English Longitudinal Study of Ageing (ELSA) of whom 86 had dementia. Data were collected in computer-assisted interviews in participants’ households. A moderated-mediated Generalized Linear Model showed that dementia did not predict the odds of psychosis. Dementia was associated with psychosis through loneliness, poor autonomy/control, poor life satisfaction, poor physical health and eyesight loss as mediating variables. Discrimination did not moderate the association between dementia and psychosis. The results support the Lancet Commission’s recommendations about holistic approaches to dementia care. The results suggest that psychiatrists involved in dementia care should consider “social prescribing” of interventions that reduce patients’ loneliness, increasing autonomy/control and life satisfaction through organized activities, employment or volunteering. Psychiatrists are encouraged to consider a range of problems (e.g., in vision/hearing) that may make patients feel more cognitively vulnerable and, thus, more at risk of psychosis.</p>