The objective of this study was to investigate the relation between the peripheral concentrations of the adrenal steroid hormones cortisol and dehydroepiandrosterone sulfate (DHEAS) and cognitive impairment and decline. A prospective study design was used. The setting was a suburb of Rotterdam, The Netherlands. The study population consisted of a sample of 189 healthy participants from the population-based Rotterdam Study, aged 55-80 yr, who were invited for an additional examination. Follow-up examinations took place 1.9 yr after baseline, on the average. We determined fasting blood levels of DHEAS before dexamethasone administration and of cortisol and corticosteroid-binding globulin before and after the administration of 1 mg dexamethasone overnight. The 30-point Mini-Mental State Examination (MMSE) was used to assess cognition. The associations with cognitive impairment (MMSE score of <26; 6% of the sample) and cognitive decline (drop in MMSE score of >1 point/yr; 24%) were estimated using logistic regression, with adjustment for age, sex, education, and depressive symptoms. An increase of 1 SD in the estimate of free cortisol (SD = 30.3) was associated with cognitive impairment, although not significantly [odds ratio (OR) = 1.5; 95% confidence interval (CI), 0.9-2.4]. A 1 SD increase in the natural logarithm of cortisol after the administration of 1 mg dexamethasone (SD = 0.68) was associated with an OR for cognitive decline of 1.5 (95% CI, 1.0-2.3). A 1 SD increase in DHEAS (SD = 2.10 micromol/L) was inversely, but nonsignificantly, related to cognitive impairment (OR = 0.5; 95% CI, 0.2-1.1) and cognitive decline (OR = 0.6; 95% CI, 0.4-1.1). The ratio of free cortisol over DHEAS was significantly related to cognitive impairment (OR = 1.8; 95% CI, 1.0-3.2). This prospective study among healthy elderly subjects suggested that basal free cortisol levels were positively related to cognitive impairment, and cortisol levels after dexamethasone treatment were related to cognitive decline. There was an inverse, but nonsignificant, association between DHEAS and cognitive impairment and decline.