Background: Oral oxybutynin has been associated with the development of cognitive impairment. Objective: The objective of this study was to describe the use of oral oxybutynin versus other antimuscarinics (e.g., tolterodine, darifenacin, solifenacin, trospium, fesoterodine, transdermal oxybutynin) in older adults with documented cognitive impairment. Methods: This is a population-based retrospective analysis of antimuscarinic new users aged ≥ 66 years from January 2008 to December 2011 (n = 42,886) using a 5% random sample of Medicare claims linked with Part D data. Cognitive impairment was defined as a diagnosis of mild cognitive impairment, dementia, use of antidementia medication, and memory loss/drug-induced cognitive conditions in the year prior to the initial antimuscarinic claim. We used multivariable generalized linear models to assess indicators of cognitive impairment associated with initiation of oral oxybutynin versus other antimuscarinics after adjusting for comorbid conditions. Results: In total, 33% received oral oxybutynin as initial therapy. Cognitive impairment was documented in 10,259 (23.9%) patients prior to antimuscarinic therapy. Patients with cognitive impairment were 5% more likely to initiate another antimuscarinic versus oral oxybutynin (relative risk [RR] 1.05; 95% confidence interval [CI] 1.03–1.06). The proportion of patients with cognitive impairment initiated on oral oxybutynin increased from 24.1% in 2008 to 41.1% in 2011. The total cost of oral oxybutynin, in $US, year 2011 values, decreased by 10.5%, whereas the total cost of other antimuscarinics increased by 50.3% from 2008 to 2011. Conclusion: Our findings suggest opportunities for quality improvement of antimuscarinic prescribing in older adults, but this may be hampered by cost and formulary restrictions.