Background: Dementia and stroke are major causes of disability in the elderly. However, the association between pre-stroke dementia and functional outcome after stoke remains unresolved. We aimed to determine this association in patients with acute ischemic stroke. Methods: Among patients registered in the Fukuoka Stroke Registry from June 2007 to May 2015, 4,237 patients with ischemic stroke within 24 h of onset, who were functionally independent before the onset, were enrolled in this study. Pre-stroke dementia was defined as any type of dementia that was present prior to the index stroke. Primary and secondary study outcomes were poor functional outcome (modified Rankin Scale 3-6) at 3 months after the stroke onset and neurological deterioration (≥2-point increases on the National Institutes of Health Stroke Scale score during hospitalization), respectively. For propensity score (PS)-matched cohort study to control confounding variables for pre-stroke dementia, 318 pairs of patients with and without pre-stroke dementia were also selected on the basis of 1:1 matching. Multivariable logistic regression models and conditional logistic regression analysis were used to quantify associations between pre-stroke dementia and study outcomes. Results: Of all 4,237 participants, 347 (8.2%) had pre-stroke dementia. The frequencies of neurological deterioration and poor functional outcome were significantly higher in patients with pre-stroke dementia than in those without pre-stroke dementia (neurological deterioration, 16.1 vs. 7.1%, p < 0.01; poor functional outcome, 63.7 vs. 27.1%, p < 0.01). Multivariable analysis showed that pre-stroke dementia was significantly associated with neurological deterioration (OR 1.67; 95% CI 1.14-2.41; p < 0.01) and poor functional outcome (OR 2.91; 95% CI 2.17-3.91; p < 0.01). In the PS-matched cohort study, the same trends were observed between the pre-stroke dementia and neurological deterioration (OR 2.60; 95% CI 1.17-5.78; p < 0.01) and between the dementia and poor functional outcome (OR 3.62; 95% CI 1.89-6.95; p < 0.01). Conclusions: Pre-stroke dementia was significantly associated with higher risks for poor functional outcome at 3 months after stroke onset as well as for neurological deterioration during hospitalization in patients with acute ischemic stroke.