Background: Cognitive reserve is thought to influence the degree of neuropathology needed for diagnosis of Alzheimer disease (AD). Cognitive reserve can be operationally defined as the hypothesized capacity of the mature adult brain to sustain the effects of disease or injury without manifesting clinical symptoms of AD, but sufficient to cause clinical dementia in an individual possessing less cognitive reserve. Its effect on the subsequent course of AD is less clear. Pre-morbid IQ is a useful measure of cognitive reserve. Methods: We studied 659 consecutive patients with AD at a tertiary referral memory clinic. Patients were assessed on six cognitive tests at baseline. Activities of Daily Living (ADL) were measured on the Instrumental Activities of Daily Living (IADL) scale and Physical Self-Maintenance Scale (PSMS). The National Adult Reading Test (NART) was used to estimate pre-morbid IQ. Patients were followed up after starting a cholinesterase inhibitor over 78 weeks. Mixed general linear models estimated the effects of NART on cognition and ADL. Results: Three hundred and fifty-five patients had NART scored with a mean estimated pre-morbid IQ of 104.7 (standard deviation 18.5). NART increased overall cognitive ability by 2.7% for every 10 IQ points (p < .001). There was a trend for an effect on the change in cognition over time (p = .065) with higher NART associated with improvement of cognitive ability over time. After adjusting for age and sex, a 10 point increase in NART was associated with an improvement of 2% in ADL scores, but this effect was explained by NART's influence on contemporaneous cognitive ability. Conclusion: Our data support the hypothesis that cognitive reserve continues to have a limited influence on cognition after AD has been diagnosed and thus, indirectly, has an impact on ADL.