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We investigated the prevalence of dementia and mild cognitive impairment (MCI) and the factors associate with risk of dementia from a representative nationwide sample of Korean elders. 8,199 randomly-sampled Koreans aged 65 years or older were invited to participate in the Phase I screening assessment using Mini-Mental State Examination by door-to-door home visit, and 6,141 subjects (response rate = 74.9%) responded. Among them, 2,336 subjects were invited to participate in the Phase II diagnostic assessment for dementia and MCI, and 1,673 subjects responded (response rate = 71.6%). Diagnostic assessments were administered using the Korean version of the Consortium to Establish a Registry for Alzheimer's Disease Assessment Packet (CERAD-K) Clinical Assessment Battery. The CERAD-K Neuropsychological Assessment Battery was used for diagnosing MCI. Age-, gender-, education-, and urbanicity-standardized prevalence of dementia was estimated to be 8.1% (95% CI = 6.9-9.2) for overall dementia and 24.1% (95% CI = 21.0-27.2) for MCI. Alzheimer's disease (AD) was the most prevalent type (5.7%) followed by vascular dementia (2.0%). Amnestic subtype (20.1%) was much more prevalent than nonamnestic subtype in MCI (4.0%). Older age, being male, lower education level, illiteracy, smoking, and histories of head trauma or depression were associated with increased dementia risk, and alcohol use and moderately intense exercise were associated with decreased dementia risk. We expect numbers of dementia patients to double every 20 years until 2050 in Korea and expect AD to account for progressively more dementia cases in the future.