Background: Psychosis is a common and debilitating side effect of long-term dopaminergic treatment of Parkinson disease (PD). While clozapine is an effective treatment, the need for blood monitoring has limited its first-line use. Objective: Since olanzapine shows similar receptor affinity to clozapine, we hypothesized that it might be an effective alternative to clozapine for treatment of drug-induced psychosis (DIP) in PD, and that lower doses than usual might make it tolerable. Methods: In 1998-2003 we conducted a four-week, double-blind, placebo-controlled, parallel group, fixed-dose trial of olanzapine (0, 2.5mg, or 5mg) in 23 PD patients with DIP while allowing for clinically realistic dose adjustments of dopaminomimetic mid-study. The primary outcome measures were Brief Psychiatric Rating Scale (BPRS) ratings scored from videotaped interviews after study termination by an observer blinded to dose assignment and to interview timing, and CGI (Clinical Global Impression). The Unified Parkinson's Disease Rating Scale motor subscale (UPDRS) was the primary measure of tolerability. Results: Intention-to-treat analysis found no significant differences among treatment groups in study completion or serious adverse events. However, a disproportionate number of olanzapine vs. placebo subjects reported mild side effects (p<0.04), many citing motor worsening. Fourteen patients completed the study (seven on placebo, two on 2.5mg olanzapine, five on 5mg olanzapine). In study completers, analysis by repeated measures ANOVA revealed no significant difference between olanzapine and placebo groups in BPRS psychosis reduction (p=0.536), parkinsonism (p=0.608), or any other measured parameters (CGI, MMSE, Beck Depression Inventory, Hamilton Depression score, PDQ 39, Schwab-England ADL assessment, and sleep scores). Conclusion: This study adds to other evidence that olanzapine is ineffective in treating medication-induced psychosis in Parkinson disease.