In patients with Alzheimer's disease (AD), neuroimaging studies have demonstrated decreased brain activation, while increased activation was detected in patients with mild cognitive impairment (MCI). It can be hypothesized that increased cerebral activity seen in patients with MCI reflects neural compensation at the beginning of neurodegenerative processes. Later, as patients develop AD, neural integrity is increasingly impaired. This is accompanied by decreased neural activation. In this study we examined cognitive performance and functional magnetic resonance imaging activation on a Clock Reading task (CRT) and a Spatial Control task (SCT) in healthy controls, patients with MCI, and patients with early AD. Correlations between neural-functional activation and cognitive state, measured by the Mini Mental Status Examination, were determined using rank, linear and quadratic correlation models. It could be shown that CRT, in comparison to SCT, specifically activates brain regions in the ventral visual stream and precuneus known to be involved in conceptual processing and spatial imagery. The correlation between brain activity and cognitive state followed a quadratic rather than a linear pattern in several brain regions, including the lingual gyrus, cuneus, and precuneus. The strongest brain activity was found in patients with MCI and less severely impaired early AD subjects. These findings support the hypothesis that patients in early stages of dementia compensate for neuronal loss by the recruitment of additional neural resources reflected by increased neural activation, as measured by the blood oxygen level-dependent signal.