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What causes hallucinations? Mental illnesses . Mental illnesses are among the most common causes of hallucinations. Schizophrenia, dementia, and delirium are a few examples. Substance abuse . Substance abuse is another fairly common cause of hallucinations.
1 Alzheimer's disease is the most common cause of dementia in people older than age 65.  Delirium is a sudden change in how well a person's brain is working (mental status). Delirium can cause confusion, change the sleep-wake cycles, and cause unusual behavior.