Background The fornix is the predominant outflow tract of the hippocampus, a brain region known to be affected early in the course of Alzheimer's disease (AD). The aims of the present study were to: (1) examine the cross-sectional relationship between fornix diffusion tensor imaging (DTI) measurements (fractional anisotropy [FA], mean diffusivity [MD], axial diffusivity, and radial diffusivity), hippocampal volume, and memory performance, and (2) compare fornix DTI measures with hippocampal volumes as predictors of progression and transition from amnestic mild cognitive impairment to AD dementia. Methods Twenty-three mild cognitive impairment participants for whom hippocampal volumetry and DTI were conducted at baseline received detailed evaluations at baseline; 3, 6, and 12 months; and 2.5 years. Six participants converted to AD over the follow-up period. Fornix and posterior cingulum DTI measurements and hippocampal volumes were ascertained using manual measures. Random effects models assessed each of the neuroimaging measures as predictors of decline on the Mini-Mental State Examination, Clinical Dementia Rating-sum of boxes, and memory z scores; receiver operating characteristic analyses examined the predictive value for conversion to AD. Results There was a significant correlation between fornix FA and hippocampal volumes. However, only the fornix measurements (FA, MD, radial diffusivity, and axial diffusivity) were cross-sectionally correlated with memory z scores. Both fornix FA and hippocampal volumes were predictive of memory decline. Individually, fornix FA and MD and hippocampal volumes were very good predictors of progression, with likelihood ratios >83, and better than 90% accuracy. Conclusion Fornix FA both cross-sectionally correlated with and longitudinally predicted memory decline and progression to AD. Manually drawn region of interest within the fornix shows promise comparable with hippocampal volume as a predictive biomarker of progression, and this finding warrants replication in a larger study.