Lead researcher Dr Marnie Shaw said about one in 10 Australians aged 65 years and older will experience dementia.
The researchers observed 400 people in their 60s and early 70s from Canberra at several different stages over time.
Dr Shaw said the study was the first to show that the relationship between body mass index (BMI) and brain shrinkage changed from mid-life to older age. Research evidence has linked brain shrinkage to the onset of dementia.
The researchers measured longitudinal cortical thinning throughout the whole brain, based on magnetic resonance imaging (MRI) scans.
Both increasing and decreasing BMI were associated with greater brain shrinkage at an older age.
The research, published in the International Journal of Obesity, noted that the pattern of cortical thinning related to increasing BMI in both mid-life and later life was consistent with known obesity-related dementia risk.
With regards to increased cortical thinning in association with decreasing BMI in later life, they noted that this "may help explain the 'obesity paradox', where high BMI in mid-life appears to be a risk factor for dementia, but high BMI in late life appears, at times, to be protective."
Dr Shaw said weight loss during people's later years was common, and often occurred due to losing muscle mass.
"Preliminary results from our research indicate that it's important for people in (their) later years to go to the gym to maintain a healthy weight and not lose their muscles," she said.
The other main risk factors for dementia include mid-life obesity, physical inactivity, smoking, hypertension and depression.
ANU collaborated with the University of New South Wales on the research.
Source: International Journal of Obesity
"Body mass index is associated with cortical thinning with different patterns in mid- and late-life"
Authors: ME Shaw, et al.