The apolipoprotein E (apoE) epsilon 4 allele is overrepresented, and the apoE epsilon 2 allele underrepresented, in Alzheimer's disease. To assess the risk of cognitive impairment in individuals with these genotypes in the general population, we studied a population-based sample of 1,899 individuals 65 years and older as a follow-up to the Iowa 65+ Rural Health Study. Multiple regression and logistic regression analyses demonstrated significant effects of apoE epsilon 4 and apoE epsilon 2 in predicting performance on a delayed recall task over a 4- to 7-year period. The magnitude of this effect was, however, fairly modest, with odds ratios for developing impairment of approximately 1.37 (95% confidence interval: 1.007, 1.850; p = 0.045) for apoE epsilon 4 and 0.53 (95% confidence interval: 0.368, 0.777; p = 0.001) for apoE epsilon 2. These effects were more pronounced in women than men. Importantly, 85% of elderly apoE E4/4 individuals (average age, 81) scored in the unimpaired range on a screening mental status test. Thus, many individuals reach old age without cognitive impair- ment despite inheritance of one or two apoE epsilon 4 alleles. This suggests that apoE genotyping will have limited utility as a diagnostic or prognostic indicator of cognitive decline in individuals.