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Abstract Introduction Racial disparities in Alzheimer's disease (AD) and all‐cause dementia (DEMENTIA) incidence may exist differentially among men and women, with unknown mechanisms. Methods A retrospective cohort study examining all‐cause and AD dementia incidence was conducted linking Third National Health and Nutrition Examination Survey (NHANES III) to Centers for Medicare & Medicaid Services Medicare data over ≤26 years of follow‐up (1988 to 2014). Cox regression and generalized structural equation models (GSEMs) were constructed among men and women ≥60 years of age at baseline (N = 4592). Outcomes included onset ages of all‐cause and AD dementia, whereas the main exposures were race/ethnicity contrasts (RACE_ETHN). Potential mediators) included socio‐economic status (SES), lifestyle factors (dietary quality [DIET] nutritional biomarkers [NUTR], physical activity [PA], social support [SS], alcohol [ALCOHOL], poor health [or HEALTH], poor cognitive performance [or COGN]. In addition to RACE_ETHN, the following were exogenous covariates in the GSEM and potential confounders in Cox models: age, sex, urban‐rural, household size, and marital status. Results Non‐Hispanic Black (NHB) women had a higher risk of DEMENTIA versus non‐Hispanic White (NHW) women in GSEM, consistent with Cox models (age‐adjusted model: hazard ratio [HR] = 1.34, 95% confidence interval [CI]: 1.10 to 1.61). The total effect of this RACE_ETHN contrast in women was explained by four main pathways: (1) RACE_ETHN→ poor cognitive performance (COGN, +) → DEMENTIA (+); (2) RACE_ETHN → SES (−) → COGN (−) → DEMENTIA (+); (3) RACE_ETHN → SES (−) → physical activity (PA, +) → COGN (−) → DEMENTIA (+); and (4) RACE_ETHN → SES (−) → DIET (+) → COGN (−) → DEMENTIA (+). A reduced AD risk in Mexican American (MA) women versus NHW women upon adjustment for SES and downstream factors (HR = 0.53, 95% CI: 0.35 to 0.80). For the non‐White versus NHW contrast in incident DEMENTIA, pathways involved lower SES, directly increasing cognitive deficits (or indirectly through lifestyle factors), which then directly increases DEMENTIA . Discussion Socioeconomic and lifestyle factors explaining disparities between NHB and NHW in dementia onset among women are important to consider for future observational and intervention studies.