Background: Mild behavioral impairment (MBI) has been proposed as risk factor for dementia, and for some, an early manifestation of dementia. Objective: We examined the prevalence of MBI in the psychiatric outpatient clinic, and compared the incidence of dementia in MBI with that in other psychiatric diseases. Methods: Retrospective chart review was conducted in 2,853 consecutive outpatients over the age of 50. MBI was diagnosed according to the International Society to Advance Alzheimer's Research and Treatment research diagnostic criteria. The incidence rate of dementia was examined in the patients who were followed up for at least 1 month. Kaplan-Meier survival analyses and Cox proportional hazards regression models were performed to compare the time to onset of dementia between MBI and other psychiatric diseases. Results: The prevalence of MBI was 3.5% and the incidence of dementia was 30.7 cases per 1000 person-years. The hazard ratio (HR) for dementia was higher for MBI than other psychiatric diseases (HR: 8.07, 95% confidence interval: 4.34-15.03, p < 0.001). In MCI patients, the cumulative survival in MCI with affective dysregulation tended to be lower than that in MCI without (p = 0.090). Conclusions: Psychiatric outpatients often meet MBI criteria. MBI, especially the affective dysregulation domain, increases the risk of dementia in this psychiatric outpatient population. Since late-onset psychiatric and behavioral symptoms may be prodromal symptoms of dementia in some, careful observation is needed, and psychiatric clinicians should keep prodromal dementia on their differential diagnosis when assessing those with new onset psychiatric symptomatology in older adults.