Objective: It was the aim of this study to investigate facial emotion recognition (FER) in the elderly with cognitive impairment. Method: Twelve patients with Alzheimer’s disease (AD) and 12 healthy control subjects were asked to name dynamic or static pictures of basic facial emotions using the Multimodal Emotion Recognition Test and to assess the degree of their difficulty in the recognition task, while their electrodermal conductance was registered as an unconscious processing measure. Results: AD patients had lower objective recognition performances for disgust and fear, but only disgust was accompanied by decreased subjective FER in AD patients. The electrodermal response was similar in all groups. No significant effect of dynamic versus static emotion presentation on FER was found. Conclusion: Selective impairment in recognizing facial expressions of disgust and fear may indicate a nonlinear decline in FER capacity with increasing cognitive impairment and result from progressive though specific damage to neural structures engaged in emotional processing and facial emotion identification. Although our results suggest unchanged unconscious FER processing with increasing cognitive impairment, further investigations on unconscious FER and self-awareness of FER capacity in neurodegenerative disorders are required.