We studied the habituation of auditory N100 responses in subjects with age-associated memory impairment (AAMI) and in healthy age-matched volunteers. The findings were correlated with volumes of the amygdala, hippocampus, and frontal lobe measured by magnetic resonance imaging (MRI), as well as with subjects' performance on tests assessing frontal lobe functions and memory. Habituation of N100 did not differ across AAMI subjects and controls. However, in AAMI subjects there was a significant correlation between habituation of N100 and volumes of the amygdala; the more reduced habituation, the smaller volume. In addition, decline in habituation of N100 correlated with impaired performance on a visual memory test (Heaton Visual memory test (Heaton Visual Retention Test; r = 0.77; p < 0.001) and impairment on tests assessing frontal functions (Verbal Fluency, Trail Making Test, and Stroop). Habituation of N100 was not related to age or sex. To our knowledge this is the first study to demonstrate a relationship between habituation of evoked responses, MRI volumetric measures, and performance on psychometric tests. The results suggest that impaired memory and frontal lobe functions in AAMI subjects may be associated with poor habituation of N100. Since habituation reflects focusing of attention to relevant features of stimuli, impairment of this mechanism and subsequent defective memory trace formation may contribute to the observed deficits on memory tests.