Although in the last decade brain activation in healthy aging and dementia was mainly studied using task-activation fMRI, there is increasing interest in task-induced decreases in brain activity, termed deactivations. These deactivations occur in the so-called default mode network (DMN). In parallel a growing number of studies focused on spontaneous, ongoing 'baseline' activity in the DMN. These resting state fMRI studies explored the functional connectivity in the DMN. Here we review whether normal aging and dementia affect task-induced deactivation and functional connectivity in the DMN. The majority of studies show a decreased DMN functional connectivity and task-induced DMN deactivations along a continuum from normal aging to mild cognitive impairment and to Alzheimer's disease (AD). Even subjects at risk for developing AD, either in terms of having amyloid plaques or carrying the APOE4 allele, showed disruptions in the DMN. While fMRI is a useful tool for detecting changes in DMN functional connectivity and deactivation, more work needs to be conducted to conclude whether these measures will become useful as a clinical diagnostic tool in AD. This article is part of a Special Issue entitled: Imaging Brain Aging and Neurodegenerative disease.