Community-dwelling older adults with sleep disorders are at higher risk of developing dementia. Greater than 50% of older patients with kidney failure experience sleep disorders, which may explain their high burden of dementia. Among 216,158 patients (age ≥66 years) with kidney failure (United States Renal Data System; 2008-2019), we estimated the risk of dementia (including subtypes) associated with sleep disorders using Cox proportional-hazard models with propensity score weighting. We tested whether positive airway pressure (PAP) therapy was associated with reduced dementia risk among patients with obstructive sleep apnea (OSA). 26.3% of patients were diagnosed with sleep disorders; these patients had a higher five-year unadjusted cumulative incidence for any type of dementia (36.2% vs. 32.3%; P<0.001), vascular dementia (4.4% vs. 3.7%; P<0.001), and other/mixed dementia (29.3% vs. 25.8%; P<0.001). Higher risk of any type of dementia was identified in patients with insomnia (aHR=1.42; 95%CI: 1.34-1.51), sleep-related breathing disorders (SRBDs) (aHR=1.20; 95%CI: 1.17-1.23), and other sleep disorders (aHR=1.24; 95%CI: 1.11-1.39). Higher vascular dementia risk was observed in patients with insomnia (aHR=1.43; 95%CI: 1.19-1.73), SRBDs (aHR=1.15; 95%CI: 1.07-1.24). Patients with SRBDs (aHR=1.07; 95%CI: 1.00-1.15) were at higher risk of Alzheimer's disease. Among patients with OSA, PAP therapy was associated with lower risk for any type of dementia (aHR=0.82; 95%CI: 0.76-0.90), and vascular dementia (aHR=0.65; 95%CI: 0.50-0.85). Older patients with kidney failure and sleep disorders are at a higher risk of dementia. Sleep is an important modifiable factor that should be considered for targeted interventions to mitigate dementia risk in patients with kidney failure. For patients with OSA, PAP therapy is associated with lower dementia risk.