Epilepsy is a major health problem. Several studies suggest a significant influence of epilepsy and its treatment on dynamic and functional properties of brain activity. Epilepsy can adversely affect mental development, cognition, and behavior. Epileptic patients may experience reduced intelligence, attention, and problems in memory, language, and frontal executive functions. Neuropsychological, functional, and quantitative neuroimaging studies revealed that epilepsy affect the brain as a whole. Mechanisms of epilepsy-related cognitive dysfunction are poorly delineated. Cognitive deficits with epilepsy may be transient, persistent, or progressive. Transient disruption of cognitive encoding processes may occur with paroxysmal focal or generalized epileptic discharges, whereas epileptogenesis-related neuronal plasticity, reorganization, sprouting, and impairment of cellular metabolism are fundamental determinants for progressive cognitive deterioration. Also antiepileptic drugs (AEDs) have differential, reversible, and sometimes cumulative cognitive adverse consequences. AEDs not only reduce neuronal irritability but also may impair neuronal excitability, neurotransmitter release, enzymes, and factors critical for information processing and memory. The present article serves as an overview of recent studies in adult and childhood epilepsy literatures present in PubMed that highlighted cognitive evaluation in epilepsy field (publications till 2008 were checked). We also checked the reference lists of the retrieved studies for additional reports of relevant studies, in addition to our experience in this field. Our search revealed that although the aspects of cognitive dysfunction, risk factors, and consequences have been explored in many studies; however, the mechanisms of contribution of epilepsy-related variables, including AEDs, to patients' cognition are largely unexplored. In this review, we discussed the differential effect of AEDs in mature and immature brains and the known mechanisms underlying epilepsy and AEDs adverse effects on cognition. The nature, timing, course, and mechanisms of cognitive alteration with epilepsy and its medications are of considerable clinical and research implications.