Key Inclusion Criteria: 1. Is a male or female aged 55 to 90 years, inclusive, at Screening. 2. Can understand the nature of the trial and protocol requirements and provide informed consent or assent before any study assessments are performed. 3. Meets clinical criteria for Possible AD or Probable AD. 4. Living at the same home or residential assisted-living facility for a minimum of 6 weeks before Screening. 5. Have an identified study partner who should have daily contact (approximately 10 hours a week or more). 6. History of psychotic symptoms (meeting International Psychogeriatric Association criteria) (Cummings 2020) for at least 2 months prior to Screening. 7. CGI-S scale with a score ≥ 4 at Screening and Baseline. 8. AD subjects are required to have NPI-C: Hallucinations and Delusions (H+D) score of ≥ 6 AND meet at least 1 of the following criteria at Screening and Baseline: 1. Moderate to severe delusions, defined as NPI-C: Delusions domain score of ≥ 2 on 2 of the 8 items OR 2. Moderate to severe hallucinations, defined as NPI-C: Hallucinations domain score of ≥ 2 on 2 of the 7 items 9. MMSE score of 8 to 22, inclusive, at Screening. Key Exclusion Criteria: 1. Psychotic symptoms that are primarily attributable to a condition other than the AD causing the dementia. 2. History of major depressive episode with psychotic features during the 12 months prior to Screening. 3. History of bipolar disorder, schizophrenia, or schizoaffective disorder. 4. Significant or severe medical conditions including pulmonary, hepatic, renal, hematologic, gastrointestinal, endocrine, immunologic, dermatologic, neurologic, cardiovascular, or oncologic disease or any other condition that, in the opinion of the Investigator, could jeopardize the safety of the subject, ability to complete or comply with the study procedures or validity of the study results. 5. History or high risk of urinary retention, gastric retention, or narrow-angle glaucoma as evaluated by the Investigator. 6. Prior exposure to KarXT. 7. History of hypersensitivity to KarXT excipients or trospium chloride. 8. Experienced any significant adverse events (AEs) due to trospium. 9. Participation in another clinical study in which the subject received an experimental or investigational drug within 3 months before Screening or has participated in more than 2 clinical studies in the 12 months prior to Screening.