The present study evaluated the clinical course of patients with mild cognitive impairment (MCI), the pattern of electroencephalography (EEG) changes following cognitive deterioration, as well as the potential of neurophysiological measures in predicting dementia. Twenty-seven subjects with MCI were followed for a mean follow up period of 21 months. Fourteen subjects (52%) progressed (P MCI) to clinically manifest Alzheimer's disease (AD), and 13 (48%) remained stable (S MCI). The two MCI subgroups did not differ in baseline EEG measures between each other and the healthy controls (n = 16), but had significantly lower theta relative power at left temporal, temporo-occipital, centro-parietal, and right temporo-occipital derivation when compared to the reference AD group (n = 15). The P MCI baseline alpha band temporo-parietal coherence, alpha relative power values at left temporal and temporo-occipital derivations, theta relative power values at frontal derivations, and the mean frequency at centro-parietal and temporo-occipital derivations overlapped with those for AD and control groups. After the follow-up, the P MCI patients had significantly higher theta relative power and lower beta relative power and mean frequency at the temporal and temporo-occipital derivations. A logistic regression model of baseline EEG values adjusted for baseline Mini-Mental Test Examination showed that the important predictors were alpha and theta relative power and mean frequency from left temporo-occipital derivation (T5-O1), which classified 85% of MCI subjects correctly.