Objective: The epsilon4 allele of the apolipoprotein E (APOE) genotype is the most widely accepted genetic risk factor for Alzheimer's dementia (AD), but findings on whether it is a risk factor for the AD prodrome, mild cognitive impairment (MCI), have been inconsistent. In a prospective longitudinal design, we investigated (a) whether transitions to MCI and other forms of neurocognitive impairment without dementia (CIND) are more frequent among normal epsilon4 carriers than among noncarriers and (b) whether subsequent transitions to AD from MCI and from other forms of CIND are more frequent among epsilon4 carriers than among noncarriers. Method: The frequency of the epsilon4 allele was studied in older adults (mean age > 70), who had participated in two or more waves of neuropsychological testing and diagnosis in the Aging, Demographics, and Memory Study (ADAMS) of the United States Department of Health and Human Services, National Institutes of Health, National Institute on Aging's Health and Retirement Study, conducted by the University of Michigan. The association between epsilon4 and longitudinal transitions to specific types of CIND and dementia can be determined with this data set. Results: Epsilon 4 increased the rate of progression from normal functioning to MCI (58% of new diagnoses were carriers) but not to other forms of CIND. The rate of progression to AD from MCI or from other forms of CIND was not increased by epsilon4. Conclusions: The results support the hypothesis that epsilon4 is a risk factor for transitions from normal functioning to MCI but not for subsequent transitions to AD. In the ADAMS sample, the reason epsilon4 is elevated in AD individuals is because it is already elevated in MCI individuals, who are the primary source of new AD diagnoses. (PsycINFO Database Record (c) 2013 APA, all rights reserved).