Background The neural and cognitive substrates of measures of orientation as used in clinical trials and examinations have not been comprehensively examined. Methods We studied 473 subjects diagnosed with mild cognitive impairment (MCI) and Alzheimer's disease (AD) at baseline in Alzheimer's Disease Neuroimaging Initiative. Regression analyses at baseline were conducted to find significant predictors of orientation score among cognitive, brain morphometry, and glucose metabolism measures. Mixed model longitudinal analysis was performed to examine consequences of orientation on functional decline, and Cox hazard models examined the risk of conversion to AD in the MCI group. Results In MCI and AD subjects, orientation was predicted by poorer neurocognitive performance on immediate and delayed episodic memory and attention and processing speed. Among magnetic resonance imaging measures, orientation was predicted by entorhinal cortex thickness, hippocampal volume, and inferior temporal cortex thickness. Glucose metabolism in both middle-inferior temporal cortex and hippocampus were also predictive of orientation score. Functioning was significantly lower in disoriented subjects after 4 years of follow-up, and MCI patients who also were disoriented showed a higher rate of conversion to AD with a hazard ratio of 1.5. Conclusions Orientation is associated with medial temporal lobe structure, temporal lobe glucose metabolism, and episodic memory function. In MCI individuals orientation was a risk factor for progression to AD, also associated with rapid functional decline and worse prognosis. Thus, orientation may serve as a surrogate for episodic memory in clinical examination. These results have direct implications for the use of orientation in MCI and AD clinical trials including ceiling effects in healthy controls and issues of redundancy with measures of memory, when both are used in composite scores.