Objectives: The objectives of this study are to describe the distribution of apathy in community-based older adults and to investigate its relationships with cognition and day-to-day functioning. Methods: Data from the Cache County Study on Memory, Health and Aging were used to estimate the frequency of apathy in groups of elders defined by demographic, cognitive, and functional status and to examine the associations of apathy with impairments of cognition and day-to-day functioning. Results: Apathy was measured with the Neuropsychiatric Inventory. Clinical apathy (Neuropsychiatric Inventory score ≥4) was found in 1.4% of individuals classified as cognitively normal, 3.1% of those with a mild cognitive syndrome, and 17.3% of those with dementia. Apathy status was associated with cognitive and functional impairments and higher levels of stress experienced by caregivers. Among participants with normal cognition, apathy was associated with worse performance on the Mini-Mental State Examination, the Boston Naming and Animal Fluency tests, and the Trail Making Test-Part B. The association of apathy with cognitive impairment was independent of its association with Neuropsychiatric Inventory depression. Conclusions: In a cohort of community-based older adults, the frequency and severity of apathy is positively correlated with the severity of cognitive impairment. In addition, apathy is associated with cognitive and functional impairments in elders adjudged to have normal cognition. The results suggest that apathy is an early sign of cognitive decline and that delineating phenotypes in which apathy and a mild cognitive syndrome co-occur may facilitate earlier identification of individuals at risk for dementia.