Abstract Introduction Previous studies on serum lipid levels and cognitive outcomes have shown inconsistent results, partly due to differences in timing of lipid assessment, cognitive status, and lack of longitudinal data. This study aimed to examine both baseline and longitudinal changes in lipid profiles in relation to dementia onset and cognitive progression across different stages of cognitive impairment. Methods A retrospective cohort study was conducted using data from the History-Based Artificial Intelligent Clinical Dementia Diagnostic System (HAICDDS), a multicenter memory clinic registry in Taiwan. Among 2,452 adults aged ≥ 60 years, lipid levels (total cholesterol, low-density lipoprotein cholesterol [LDL-c], high-density lipoprotein cholesterol [HDL-c], and triglycerides [TG]) were assessed at baseline and follow-up. Participants were stratified into subjective cognitive decline, mild cognitive impairment, or dementia. Cox proportional hazards models were used to evaluate associations with incident dementia or cognitive progression. Results U-shaped associations were observed between lipid levels and cognitive outcomes. After adjusting for demographic and vascular risk factors, both low baseline values and extreme reductions—particularly in HDL-c and TG—were significantly associated with increased risk of dementia onset or progression. Conclusion Lipid instability, especially in HDL-c and TG, may serve as a marker of cognitive vulnerability. These findings suggest that longitudinal changes in serum cholesterol should be carefully monitored in older adults at risk of cognitive decline.