The structural correlates of mild cognitive impairment (MCI) were examined in 105 elderly subjects whose cognitive function ranged from intact to demented, including 38 subjects with MCI. Hippocampal volumes (left and right HcV), brain volume (BV), and grey matter volume (GMV) and white matter volume (WMV) were segmented from high resolution magnetic resonance data sets and normalised to intracranial volume (ICV). Hippocampal volume reductions, but not global brain, white or grey matter atrophy, were associated with MCI. White matter lesion severity did not differ over cognitive states. In multiple logistic regression models, normalised HcV and ICV (indicating premorbid brain volume) were significant predictors of MCI versus normality. Normalised BV and ICV significantly predicted dementia versus MCI. Absolute volumetric measures of HcV and BV yielded comparable classification accuracies. Hippocampal atrophy may be the crucial step for the transition from normality to MCI. Widespread brain atrophy may be the step to determine the transition from MCI to dementia. Brain volume reserve effects appear to be involved in both of these steps.