A London-based study, published in BMJ Open, found an association between the neurodegenerative condition and exposure to nitrogen dioxide and microscopic particles known as PM2.5.
Alzheimer’s Research UK described it is a “growing area of research”, but said the results should be treated with caution.
The researchers, from the University of London, Imperial College and King’s College London, used anonymous patient health records from the Clinical Practice Research Datalink, which collects data from GP practices.
They focused on 131,000 patients aged between 50 and 79 in 2004, who had not been diagnosed with dementia, registered at 75 general practices within the M25.
The health of the patients was tracked for an average of seven years, until they were diagnosed with dementia, died or left their GP practice.
Between 2005 and 2013, a total of 2181 patients (1.7 per cent) were diagnosed with dementia, 39 per cent of whom had Alzheimer’s disease and 29 per cent of whom had vascular dementia.
These diagnoses were found to be linked to ambient levels of nitrogen dioxide and PM2.5, based on estimates taken near the homes of patients in 2004.
Those living in areas with the top fifth of nitrogen dioxide levels had a 40 per cent increased risk of being diagnosed with dementia compared with those living in areas with the lowest, the researchers said.
A similar increase was seen with levels of PM2.5, they added.
The associations could not be explained by factors known to influence the development of the condition, but the links were more consistent for Alzheimer’s disease than vascular dementia.
The authors said: “With the future global burden of dementia likely to be substantial, further epidemiological work is urgently needed to confirm and understand better recent findings linking air pollution to dementia.
“Our results suggest both regional and urban background pollutants may be as important as near-traffic pollutants.
“The cause of these neurodegenerative diseases is still largely unknown and may be multifactorial.
“While toxicants from air pollution have several plausible pathways to reach the brain, how and when they may influence neurodegeneration remains speculative.”
Last year, a study published in The Lancet suggested living close to a busy road increases the risk of Alzheimer’s and other forms of dementia.
Dr David Reynolds, chief scientific officer at Alzheimer’s Research UK, warned the latest study does not show cause and effect.
He said: “While the researchers tried to account for factors like wealth, heart disease and other potential explanations for differences in dementia rates across the capital, it is difficult to rule out other explanations for the findings.
“The diseases that cause dementia can begin in the brain up to 20 years before symptoms start to show.
“We don’t know where people in this study lived in the two decades before their dementia diagnosis, so we have to be cautious about how we interpret these results.
“The link between air pollution and dementia risk is a growing area of research.
“This study highlights the importance of further studies that look into exposure to pollution over a longer period of time, and investigate the possible biological mechanisms underlying this link.”
Separate research, presented at the European Respiratory Society International Congress, found children who have green spaces near their homes have fewer respiratory problems such as asthma later in life.
Those who are exposed to air pollution are more likely to suffer from them, the study found.
A Defra spokesman said: “Air pollution is the top environmental risk to human health in the UK, and while air quality has improved significantly since 2010, we recognise there is more to do.
“This is why we have put in place a £3.5bn plan to reduce harmful emissions from road transport and have launched an ambitious clean air strategy which has been commended by the World Health Organisation.
“By ending the sale of conventional new diesel and petrol cars and vans by 2040, we are also acting faster to tackle air pollution than almost every other major developed economy.”
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