Abstract Background: The impact of intracranial atherosclerosis, assessed using precise methods, on cognitive function and dementia remains an area of ongoing research. This study aimed to explore the association of intracranial atherosclerosis with incident dementia in middle-aged community dwellers. Methods: A total of 1009 subjects from the Shunyi study started from 2013, with a mean age of 55.3 ± 8.6 years, were included. With magnetic resonance angiography (MRA) and high-resolution magnetic resonance imaging (HRMRI), intracranial artery stenosis and plaque were assessed. Cognitive function was evaluated twice at baseline (2013–2016) and at follow-up (2019–2021). A logistic regression model was used to test the associations. Results: The study cohort consisted of 371 males and 638 females, with a mean educational attainment of 6.7 ± 3.2 years. During a median 5.1-year follow-up, 29 incident cases of dementia were identified. Posterior circulation stenosis on MRA (odds ratio [ORs] 3.47, 95% confidence interval [CI] 1.19–10.15; P = 0.023) and basilar artery plaque on HRMRI (OR 5.51, 95% CI 1.79–16.96; P = 0.003) were associated with incident dementia, adjusting for confounding factors. While the middle cerebral artery plaque was a risk factor for cognitive decline. Conclusions: Intracranial atherosclerosis, especially posterior circulation, was independent risk factor of incident dementia in middle-aged population, implying more studies for large artery atherosclerosis therapy in the prevention of midlife dementia.