Background: Although psychomotor slowing is frequent in Alzheimer’s disease (AD) and Lewy body dementia (LBD), its mechanism and diagnostic value have not been examined. Objective: To (i) assess psychomotor speed in patients with mild cognitive impairment (MCI), AD and LBD, (ii) determine the underlying mechanisms, and (iii) examine whether psychomotor slowing constitutes a useful diagnostic marker. Methods: Psychomotor speed was assessed in MCI (n = 11) and mild dementia due to AD (n = 23) or LBD (n = 18) and controls (n = 52) with visual inspection time (VIT), digital tapping, simple reaction time (SRT) and choice reaction time (CRT) tests. Results: MCI did not differ from controls. Both dementia groups showed different patterns. In AD, VIT (p = 0.0001), tapping (p = 0.021), SRT (p = 0.0001) and decision time (p = 0.0001) were impaired as compared to controls. In LBD, VIT (p = 0.0001) was very impaired and correlated with visual hallucinations (p = 0.001); SRT lengthening (p = 0.0001) was related to attentional disorders (p = 0.0001). Conclusions: Psychomotor slowing of AD is due to slower perceptuomotor and decision processes. In LBD, psychomotor slowing is due to visual and attention disorders, and subtle visual disorders contribute to hallucinations. VIT and CRT are useful diagnostic markers.