Background: We reviewed the literature on family therapy and dementia to investigate the following: what is known about the use of family therapy in the context of living with dementia; what are the challenges of working in this context; and what guidelines/models are available to guide family therapists working with families living with dementia. Methods: We searched English language literature from 1992 onwards, classified the resulting papers into broad categories of theoretical, expository, or research (descriptive, quantitative, or qualitative), and conducted a narrative review to draw learning points from the identified papers. Results: In total 31 papers were identified: five theoretical, 11 expository; and 15 research papers. Several papers described methodologies; psychotherapeutic interventions applied to family members; or complex intervention packages in which the role of family therapy could not be separately identified, rather than family therapy. A range of outcomes were investigated, often involving the caregiver. Several authors suggest areas in dementia care where family therapy is likely to be beneficial. Conclusions: Although the literature on family therapy and dementia has grown over the past 25 years and suggests potentially useful roles for therapy, a number of challenges exist in terms of context, family, and therapy itself. There is a need for further research, particularly into the following fields: How to evaluate the success of therapy; how to ensure treatment integrity; how to make techniques from family therapy available more widely; and how to train the health and social care workforce in working with families.