Abstract Background As Japanese society continues to age, the isolation of older people is increasing, and community living for people with cognitive impairment is becoming more difficult. However, the challenges faced by people with cognitive impairment living in the community have not been fully explored because of methodological difficulties. This study re-accessed people with cognitive impairment identified in a previous epidemiological survey to explore their current situation and the risk factors associated with all-cause discontinuation of community living. Methods Under a community-based participatory framework, we examined a high-risk approach for people with cognitive impairment and a community action approach in parallel, to build a dementia-friendly community. For the high-risk approach, we achieved stepwise access to 7614 older residents, which enabled us to select and visit the homes of 198 participants with a Mini-Mental State Examination score < 24 in 2016. In 2019, we re-accessed these individuals. For the community action approach, we built a community space in the study area to build partnerships with community residents and community workers and were able to re-access participants using multiple methods. Results We found that 126 (63.6%) participants had continued living in the same community, but 58 (29.3%) had discontinued community living. Of these, 18 (9.1%) had died, 18 (9.1%) were institutionalized, 9 (4.5%) were hospitalized, and 13 (6.6%) had moved out of the community. A multiple logistic regression analysis identified the following risk factors associated with discontinuation of community living: being certified under long-term care insurance, needing housing support, and needing rights protection. Conclusions Three years after the baseline survey, 29.3% of people with cognitive impairment had discontinued community living. Despite having cognitive impairment or living alone, older people were able to continue living in the community if their needs for housing support and rights protection were met. Both social interventions and medical interventions are important to build age-friendly communities. Trial registration UMIN, UMIN000038189, Registered 3 October 2019, https://upload.umin.ac.jp/cgi-open-bin/ctr_e/ctr_view.cgi?recptno=R000043521