Lewy body dementia includes dementia with Lewy bodies and Parkinson's disease dementia and is characterized by transient clinical symptoms such as fluctuating cognition, which might be driven by dysfunction of the intrinsic dynamic properties of the brain. In this context we investigated whole-brain dynamics on a subsecond timescale in 42 Lewy body dementia compared to 27 Alzheimer's disease patients and 18 healthy controls using an EEG microstate analysis in a cross-sectional design. Microstates are transiently stable brain topographies whose temporal characteristics provide insight into the brain's dynamic repertoire. Our additional aim was to explore what processes in the brain drive microstate dynamics. We therefore studied associations between microstate dynamics and temporal aspects of large-scale cortical-basal ganglia-thalamic interactions using dynamic functional MRI measures given the putative role of these subcortical areas in modulating widespread cortical function and their known vulnerability to Lewy body pathology. Microstate duration was increased in Lewy body dementia for all microstate classes compared to Alzheimer's disease (P < 0.001) and healthy controls (P < 0.001), while microstate dynamics in Alzheimer's disease were largely comparable to healthy control levels, albeit with altered microstate topographies. Correspondingly, the number of distinct microstates per second was reduced in Lewy body dementia compared to healthy controls (P < 0.001) and Alzheimer's disease (P < 0.001). In the dementia with Lewy bodies group, mean microstate duration was related to the severity of cognitive fluctuations (ρ = 0.56, PFDR = 0.038). Additionally, mean microstate duration was negatively correlated with dynamic functional connectivity between the basal ganglia (r = - 0.53, P = 0.003) and thalamic networks (r = - 0.38, P = 0.04) and large-scale cortical networks such as visual and motor networks in Lewy body dementia. The results indicate a slowing of microstate dynamics and disturbances to the precise timing of microstate sequences in Lewy body dementia, which might lead to a breakdown of the intricate dynamic properties of the brain, thereby causing loss of flexibility and adaptability that is crucial for healthy brain functioning. When contrasted with the largely intact microstate dynamics in Alzheimer's disease, the alterations in dynamic properties in Lewy body dementia indicate a brain state that is less responsive to environmental demands and might give rise to the apparent slowing in thinking and intermittent confusion which typify Lewy body dementia. By using Lewy body dementia as a probe pathology we demonstrate a potential link between dynamic functional MRI fluctuations and microstate dynamics, suggesting that dynamic interactions within the cortical-basal ganglia-thalamic loop might play a role in the modulation of EEG dynamics.