Background: Anemia and dementia are common diseases among the elderly, but conflicting data are available regarding an association between these two conditions. We analyzed data from the Sao Paulo Ageing & Health Study to address the relationship between anemia and dementia. Methods: This cross-sectional observational study included participants aged 65 years and older from a deprived area of the borough of Butantan, Sao Paulo, Brazil. Data about demographics, education, income, and cognitive and daily life function were collected, as well as blood samples. Anemia and dementia were defined according to WHO and DSM-IV criteria, respectively. Results: Of the 2267 subjects meeting the inclusion criteria, 2072 agreed to participate in the study; of whom 1948 had a valid total blood count and were included in the analysis. Anemia was diagnosed in 203 (10.2%) participants and dementia in 99 (5.1%). The frequency of anemia was higher in patients with dementia according to univariate analysis (odds ratio (OR) = 2.00, 95% confidence interval (CI) = 1.17-3.41, p = 0.01), but this association was not present after adjusting for age (OR = 1.33, 95% CI = 0.76-2.33, p = 0.32). Further multivariate adjustment did not change the results. Conclusion: Although anemia and dementia are frequent disorders in older people, we found their relationship to be mediated exclusively by aging in this low-income population from Sao Paulo.