Objective To determine (1) whether delirium severity was associated with Apolipoprotein E (APOE) genotype status and occupational complexity, a measure of cognitive reserve, in individuals with delirium superimposed on dementia; and (2) whether decline in delirium severity was associated with these same factors over a post‐acute care (PAC) stay. Methods Control group data (n = 142) from a completed randomized clinical trial were used to address the aims of the study. Delirium severity was calculated by combining items from the Confusion Assessment Method and the Montreal Cognitive Assessment. APOE ε4 carriers versus non‐carriers were considered. Occupational complexity, a measure of cognitive reserve, was derived from the Lifetime of Experiences Questionnaire. Covariates examined included age, gender, education, Clinical Dementia Rating Scale, and the Charlson comorbidity score. Data were nested (i.e., days nested within persons) and analyzed using multilevel models. Results The presence of an APOE ε4 allele and higher Clinical Dementia Rating Scale were associated with greater delirium severity at baseline. The presence of an APOE ε4 allele was also associated with greater delirium severity averaged across the PAC stay. Occupational complexity was not associated with baseline delirium severity or average daily delirium severity; however, individuals with low occupational complexity showed a significant decreased in delirium severity during the course of their PAC stay. Conclusions Individual differences, including genetic factors and level of cognitive reserve, contribute to the severity of delirium in older adults with dementia. Copyright © 2016 John Wiley & Sons, Ltd.