Abstract This study aimed to determine if, relative to cognitively healthy controls, sleep-dependent memory consolidation (SDMC) is diminished in mild cognitive impairment (MCI), a group at high risk of conversion to dementia. We also sought to determine whether SDMC is associated with sleep characteristics, daytime episodic memory, and hippocampal integrity. Participants with MCI (n = 43) and controls (n = 20) underwent clinical and neuropsychological profiling. From polysomnography, apnea hypopnea index (AHI) and non-REM sleep spindle characteristics were derived. From magnetic resonance imaging, hippocampal subfield volumes were computed. Participants learned a novel 32-item word-pair prior to sleep; morning retention of the word-pairs was used to determine SDMC. Results showed that SDMC did not differ between MCI and controls, but there was a large effect size decrement in SDMC in those with multiple domain MCI (Hedge’s g = 0.85). In MCI, poorer SDMC was correlated with CA1 and CA3 hippocampal atrophy, shorter spindle duration, and worse daytime episodic memory. In controls, poorer SDMC was associated with higher AHI. Impaired daytime memory consolidation, reduced hippocampal volumes, shorter sleep spindles, and greater sleep apnea severity are indicators of diminished SDMC in older adults and should be explored in future studies.