Although valproate and lithium are most commonly prescribed for bipolar disorder patients, studies comparing their effects on the risk of dementia are limited. Choosing a safer mood stabilizer is clinically crucial as elderly bipolar disorder patients are at high risk of dementia onset. Therefore, we aim to evaluate and compare the effects of valproate and lithium on the risk of dementia in elderly bipolar disorder patients. This study involved 4784 bipolar disorder patients aged 50 years or older from the Korean Health Insurance Review and Assessment Service database. We estimated the risk of dementia in valproate-only users, lithium-only users, and both users compared to both medication non-users using multivariable Cox proportional hazard models. Compared to non-users, valproate-only users and both users showed a higher risk of dementia (59% and 62%, respectively). In sub-group analysis, valproate increased the dementia risk when prescribed for at least 59 days or 23 cumulative defined daily doses. However, the dementia risk associated with lithium is unclear. Therefore, we concluded that lithium has the potential to be the safer choice as a mood stabilizer over valproate for elderly bipolar disorder patients considering the risk of dementia.