Assessing the deficits in instrumental activities of daily living (IADLs) may be pivotal in understanding Alzheimer's disease (AD). Yet, the assessment of functioning in AD is often related to deficits in activities of daily living (ADLs) and assessed after manifested objective cognitive deterioration and a diagnosis of AD. Therefore, the purpose of this longitudinal, descriptive, secondary analysis is to describe the deficits in IADLs in normal-functioning elders who develop AD and in persons with mild cognitive impairment (MCI) who develop AD within a 4-year period. The study will also describe the relationship between deficits of IADLs at baseline and the progression of AD at follow-up. The sample consisted of 41 community-residing White elders (mean age = 67 +/- 8). Measurements assessed the progression of AD from normal functioning to AD (the Global Deterioration Scale) and deficits in IADLs/ADLs (the Functional Assessment Staging of AD), in cognition (Mini Mental State Examination), and in memory skills (the Guild Memory Test and Wechsler Adult Intelligence Scale). Nonparametric statistics and cross-tabulation analysis were used with an alpha of .05. Deficits in IADLs differentiated normal-functioning persons from those with MCI (LR [2, N = 401 = 9.17, p < or = .01) associated with AD progression (CV = .57, p < or = .002), and differentiated the progression of normal-functioning elders to AD (p < or = .0001). Baseline deficits in IADLs approached significance in describing AD progression at follow-up (p < or = .09). Deficits in cognition and memory skills occurred later. Assessing deficits in IADLs may significantly enhance the understanding of AD for early assessment and treatment.