Social isolation is a key concern for individuals with dementia in long-term care. A possible solution is to promote social interaction between residents. A first step toward facilitating positive relationships between residents with dementia is to understand the mechanisms behind their interactions with each other, and also how their relationships with each other are built through such interactions. Drawing on casual conversations between residents in a special care unit for dementia, this paper uses systemic functional linguistics to examine how people with dementia use language to enact and construct their role-relations with each other. Results suggest people with dementia are able and willing conversationalists. However, factors such as the extent of communication breakdown and compatibility of the interlocutors may influence whether positive relations develop or not. Casual conversation is suggested to be a promising activity to encourage positive interpersonal processes between individuals with dementia in residential care.