Delirium is common during critical illness and is associated with morbidity and mortality, but its pathophysiology is unknown. We tested whether dysfunctional cerebral autoregulation (CA) contributes to the development of delirium. Adult patients (n = 40) with respiratory failure and/or shock were prospectively enrolled. Continuous recordings of regional cerebral oxygen saturation (rSO2) were obtained by near-infrared spectroscopy (NIRS) during the first 72 h of intensive care unit (ICU) admission. CA function was estimated by the cerebral oximetry index (COx), which is the time-varying correlation between rSO2 and mean arterial pressure (MAP). Delirium was assessed daily. The median ICU stay was seven days (IQR 4–13). Twenty-four patients (60%) screened positive for delirium on at least one day during their stay. Taking positive COx values to reflect periods of CA dysfunction, we found that the cumulative duration of CA dysfunction during the first one to three days in the ICU was significantly associated with the subsequent development of delirium. Additionally, we assessed two alternative methods for estimating optimal MAP targets in individual patients. In summary, early disturbances in CA may contribute to delirium, and NIRS-derived rSO2 may be used to identify individual perfusion targets in critically ill patients.