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Epidemiological studies have identified an inverse association between cancer and dementia. Underlying methodological biases have been postulated, yet no studies have systematically investigated the potential for each source of bias within a single dataset. We used the UK Biobank to compare estimates for the cancer-dementia association using different analytical specifications designed to sequentially address multiple sources of bias, including competing risk of death, selective survival, confounding bias, and diagnostic bias. We included 140,959 UK Biobank participants aged ≥ 55 without dementia before enrollment and with linked primary care data. We used cancer registry data to identify cancer cases prevalent before UK Biobank enrollment and incident cancer diagnosed after enrollment. We used Cox models to evaluate associations of prevalent and incident cancer with all-cause dementia, Alzheimers disease (AD), and vascular dementia. We used time-varying models to evaluate diagnostic bias. Over a median follow-up of 12.3 years, 3,310 dementia cases were diagnosed. All-site incident cancer was positively associated with all-cause dementia incidence (hazard ratio [HR] = 1.14, 95% CI: 1.02-1.29), but prevalent cancer was not (HR = 1.04, 95% CI: 0.92-1.17). Results were similar for vascular dementia. AD was not associated with prevalent or incident cancer. Dementia diagnosis was substantially elevated in the first year after cancer diagnosis (HR = 1.83, 95% CI: 1.42-2.36), after which the association attenuated to null, suggesting diagnostic bias. Following a cancer diagnosis, health care utilization or cognitive consequences of diagnosis or treatment may increase chance of receiving a dementia diagnosis, creating potential diagnostic bias in electronic health records-based studies.