The findings contradict the long-held belief that estrogen pills can help keep older women's minds sharp.
The results came from a government study called the Women's Health Initiative and were published in Wednesday's Journal of the American Medical Association.
The research involved nearly 3,000 women, ages 65 to 79, who had had hysterectomies and had taken daily estrogen-only pills, sold by Wyeth Pharmaceuticals as Premarin, for an average of about five years.
Dementia was diagnosed in 28 women who took estrogen, compared with 19 taking dummy pills. Those results were not statistically significant because the numbers were so small, but the trend was troubling, said co-researcher Stephen Rapp, a professor of psychiatry and behavioral medicine at Wake Forest University.
"Translated to a population of 10,000 older women taking estrogen alone, there would be an additional 12 cases of dementia per year," said lead author Dr. Sally Shumaker of Wake Forest University.
In addition, 76 women on estrogen developed mild bouts of forgetfulness, compared with 58 women in the placebo group.
Pooling those results with the dementia group, the researchers found estrogen users faced a 38 percent increased risk of developing dementia or forgetfulness, and those results were statistically significant.
"No matter which outcome we're looking at, there is no evidence of benefit," Rapp said. The pills offer "no protection against dementia, and in fact the likelihood increases on hormone therapy."
The research "succeeded in resolving the important issue that hormone therapy should not be given to women older than 65 years to prevent or delay onset of dementia, or with any expectation for meaningfully improving cognitive function," said Dr. Lon Schneider of the University of Southern California.
Whether different results would be found in younger women or with lower estrogen doses is unknown.
Dr. Gary Stiles, Wyeth's chief medical officer, called the results disappointing and said Wyeth is continuing to develop new products for treating menopause symptoms, which can include hot flashes and vaginal dryness.
Estrogen-only pills have been linked to uterine cancer. Because of that, most women who take hormones at menopause have used combined estrogen-progestin pills.
But use of both types has dropped steeply in the past two years as the WHI results have trickled out. Worldwide sales of Wyeth's estrogen and progestin pills fell from $2.1 billion in 2001 to $1.27 billion last year.
Most doctors now advise women to take the lowest possible dose for the shortest possible time.
The initial WHI results, announced in 2002, found that Wyeth's estrogen-progestin pills, sold as Prempro, increased older women's risk of breast cancer, strokes and heart attacks.
The WHI study was government-funded. The analysis by Shumaker, Rapp and colleagues was funded by Wyeth and Wake Forest. Shumaker has served as a consultant for Wyeth.
By Lindsey Tanner