||Practice effects (PEs) have recently gained popularity in research as a potential indicator of early cognitive decline in older adults. A majority of studies demonstrate decreasing PEs with cognitive decline, presumably due to declining memory; however, some studies have demonstrated larger PEs in the context of cognitive decline. One possible explanation for the inconsistencies in findings is that PEs are the result of multiple cognitive processes that change differentially with cognitive decline. These processes include not only memory, but also the ability to rapidly adapt to novel task demands, termed the novelty effect. We examined PE and its hypothesized components, novelty effect and learning, in 63 older adults with cognitive status ranging from normal to moderately impaired. We investigated the independent contributions of learning and novelty effect to PEs and tested whether two component processes mediated changes in PE across declining cognitive status. Novelty effect and learning each predicted PE on a different test and mediated the relationship between cognitive status and PE on those respective tests. These findings provide support for novelty effect and learning as independent contributors to PE and highlight the need for a better understanding of component processes of PE to improve its utility as a diagnostic indicator.