Purpose: Determining life expectancy in patients with dementia are challenging. We aimed at studying the association between basic activities of daily living as measured by the Barthel Index at hospital admission and mortality among older patients with dementia. Methods: All patients aged ≥ 65 years with diagnosed dementia in the population-based National Danish Geriatric Database from 2005 to 2014 were included and followed until death, emigration, or study termination (31.12.2015). Data on Barthel Index (BI) were used to assess ADL. Patients were categorized into four predefined standard BI subcategories according to the national Danish version of the statistical classification of diseases [BI = 0–24 (very low ADL), BI = 25–49 (low ADL), BI = 50–79 (moderate reduced ADL), and BI = 80–100 (independent ADL)]. Association with mortality was assessed using multivariable Cox regression analysis adjusting for age, marital status, Charlson Comorbidity Index, BMI, prior hospitalizations, year of admission and polypharmacy. Results: In total, 6550 patients (women 62%) were included, median (IQR) age 84 (79–88) years and BI 37 (13–63). Mortality increased significantly with decreasing BI in both the crude and multivariable analysis. In subcategories BI = (80–100) and BI = (0–24), survival time (median (95%)) was 3.6 (3.4–3.9) years and 0.8 (0.7–0.9) years, respectively. Also, in patients with BI = (0–24), the overall mortality risk (HR (95% CI)) was 2.5 (2.2–2.8), 30-day risk 11.8 (5.8–23.9), and 1-year risk 4.4 (3.6–5.5) when using BI = (80–100) as reference. Conclusion: Barthel Index is independently associated with all-cause mortality among older patients with dementia admitted to hospital. BI may be a helpful tool for clinicians when discussing treatment and care strategies with patients and their families.