There is little research investigating polypharmacy and potentially inappropriate medications (PIM) in connection with cognitive status in residents of Austrian nursing homes. Our findings result from a cross-sectional survey of 425 residents (315 women, 110 men, mean 83.6 years) from 12 Austrian nursing homes. The number of systemically administered permanent prescription drugs was 8.99 ± 3.9 and decreased significantly with increasing cognitive impairment. Irrespective of cognitive status, polypharmacy (> 5 individual substances) was present in approximately 75 % of the residents. Hyper-polypharmacy (> 10 individual substances) was present among almost 50 % of the cognitively intact residents, and hence, significantly more frequent as compared with the group with the lowest cognitive performance (23.4 %). At least one PIM was found in 72.4 % of residents regardless of cognitive status. Predominantly, PIMs consisted of tranquilizers, antipsychotics, osmotic laxatives, non-steroidal anti-inflammatory drugs (NSAIDs) and anticholinergics, where only the number of NSAIDs decreased significantly with increasing cognitive impairment. In summary, our study shows a continued high prevalence of polypharmacy and PIM in long-term care institutions in Austria.