The study, published in Neurology, found that statins - normally taken to reduce heart disease risk - may cut the risk of dementia by half.
The five-year project examined 1,674 Mexican Americans aged 60 and over at heightened risk of dementia.
A quarter of the patients took a statin, and in total 130 went on to develop dementia.
The jury is still out on how effective they are, but this study adds to growing evidence that they may have some benefits
Once the researchers had taken account of other risk factors, including education, smoking, and diabetes, they calculated that those who took statins had an approximately 50% lower risk of developing dementia.
The study comes hot on the heels of separate research which suggests that drugs to reduce blood pressure can also cut the risk of dementia.
It is estimated that 4 million people in England and Wales alone currently take statins.
Statins help to reduce the risk of heart disease by lowering levels of cholesterol which clog up the blood vessels.
It is thought that a poor supply of blood to the brain may be one factor which promotes the development of dementia.
Therefore, if statins help keep the blood vessels healthy, and blood flowing freely to the brain, they may help protect against the disease.
However, it is still not clear exactly how statins work on the biochemical pathways involved in dementia.
Professor Haan said one possibility is that statins may help to reduce levels of the hormone insulin, which have also been implicated in the development of dementia.