The aim of this study was to analyze the relationship between olfactory and cognitive functions in subjects affected by mild cognitive impairment (MCI) and to investigate whether olfactory deficits might reflect the likelihood of conversion from MCI to dementia. In this longitudinal study conducted on a sample of MCI outpatients, CA-SIT Smell Identification Test was administered to 88 MCI subjects and 46 healthy control subjects. MCI subjects have been divided into two groups, considering smell identification performances: 40% had normal performances (MCI olfactory-normal), whereas 60% had a moderate olfaction deficit (MCI olfactory-impaired). At 2-year follow-up, the 47% of MCI olfactory-impaired subjects and the 11% of MCI olfactory-normal subjects progressed to dementia. In a logistic regression model, a lower score in MMSE (95%, OR 1.9; IC 1.23–3.01; p = .004) and a pathological smell identification at baseline (95%, OR 5.1; IC 1.16–22.6; p = .03) were independently associated with the progression to dementia within 2 years. This study confirms that smell identification testing may be useful in high-risk settings to identify patients at risk for developing dementia.