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Postoperative cognitive dysfunction (POCD) is defined as a prolonged cognitive function impairment that occurs within weeks to months of a surgical procedure. It is especially prevalent in the elderly population, leading to increased morbidity and mortality. As anaesthetic and surgical care continues to improve and become increasingly safer, a significantly greater number of older patients have elective surgical procedures today, yet this comes with an increased POCD risk as they go through the perioperative phases. Although the pathophysiology behind the development of POCD is still under investigation, current causative mechanisms include the mode of anaesthesia administered, anaesthetic used, cerebral hypoperfusion, hyperventilation and neuroinflammation. These findings lend an insight into the importance of being cognisant of the higher likelihood of POCD in at-risk patients, including the elderly, and taking precautions to include preoperative and postoperative cognitive testing, careful monitoring during anaesthesia, blood pressure control and early treatment of postoperative complications as they arise. In this review, we provide an update on the current understanding of the pathophysiology leading to POCD, identifying risk factors, prevention and treatment strategies, with a specific focus on the elderly population.