Background Caregiver burden is one of the most common reasons for hospitalization of patients with dementia. However, changes of location are not recommended for patients with dementia and associated with negative outcomes for patients with dementia. As there is yet a lack of outpatient treatment options, this study explores psychiatric day clinic treatment as option for patients with dementia by comparing characteristics of voluntarily treated patients with dementia and their respective informal caregivers between an inpatient and day clinic setting. Methods A total of 92 patients with dementia (56 inpatient, 36 day clinic) and their informal caregiver provided information on psychosocial and clinical characteristics (Mini-Mental-Status-Test, Neuropsychiatric Inventory, Bayer Activities of Daily Living, Barthel Index, Geriatric Depression Scale-30, Beck's Depression Inventory-II, caregiver burden, Short Form Health Survey-36) at the beginning of treatment and at follow-up (nā=ā48 patient caregiver dyads) six months after discharge. Results Patients with dementia did not differ in disease severity, neuropsychiatric symptoms, and depression depending on treatment setting. However, the higher the Bayer activities of daily living score, the more likely treatment in day clinic was. Caregivers from patients with dementia in the inpatient setting were younger and reported more financial burden, whereas caregivers from patients with dementia in the day clinic reported lower physical health and more burden due to practical caring responsibilities. Longitudinal data indicated no differences in characteristics of patients with dementia and caregivers depending on treatment setting, despite caregivers from patients in the day clinic reporting more depressive symptoms after six months. Conclusion Day clinic treatment for voluntarily treated patients with dementia might be an alternative to inpatient settings. Patients with dementia do not substantially differ depending on treatment setting, rather characteristics of the caregivers were associated with placement in inpatient or day clinic setting. The needs of caregivers deserve special attention when considering treatment for patients with dementia.