Background: Traditional cognitive screening relies on episodic clinical assessments and may miss early changes preceding cognitive impairment and dementia. Wearable and mobile health technologies enable continuous monitoring of sleep, physical activity, and circadian rhythms, generating digital biomarkers that may support scalable early detection and prevention. However, current evidence remains fragmented across devices, analytic approaches, and cognitive outcomes. Objective: This study synthesizes and critically evaluates recent evidence on wearable devices for early detection and prevention of cognitive impairment and dementia, focusing on device categories, cognitive outcomes, analytic approaches, and prevention relevance. Methods: We searched PubMed, Scopus, ACM Digital Library, and SpringerLink for peer-reviewed studies published between January 2020 and December 1, 2025. Eligible studies included human participants with a mean age ≥50 years, continuous wearable-derived data collected for ≥24 hours, and validated cognitive outcomes; reviews, protocols, smartphone-only studies, and pharmacological interventions were excluded. Two reviewers independently screened studies, extracted data, and assessed risk of bias using the Appraisal Tool for Cross-Sectional Studies, Newcastle-Ottawa Scale, Cochrane Risk of Bias tool, and Quality Assessment of Diagnostic Accuracy Studies-2. Owing to substantial heterogeneity in devices, outcomes, and analytic methods, quantitative meta-analysis was not feasible; a structured narrative synthesis was conducted in accordance with PRISMA (Preferred Reporting Items for Systematic Reviews and Meta-Analyses) 2020 guidance. This study was not prospectively registered. Results: We included 49 studies, with sample sizes ranging from 14 to 91,948 participants (>200,000 total) and a median sample size of 145. Most used research-grade actigraphy (43/49, 87.8%), while fewer used commercial wearables (7/49, 14.3%). Cognitive outcomes most frequently relied on global screening instruments, including the Mini-Mental State Examination (18/49, 36.7%), followed by ICD-10 (International Statistical Classification of Diseases, Tenth Revision)–based clinical diagnoses (7/49, 14.3%) and the Montreal Cognitive Assessment (7/49, 14.3%). Analytic approaches were predominantly statistical (36/49, 73.5%), with fewer studies applying machine learning (7/49, 14.3%) or deep learning methods (6/49, 12.2%). Statistical analyses linked disrupted sleep, circadian rhythm fragmentation, and irregular activity patterns to worse cognitive outcomes, with modest-to-moderate effect sizes. Machine learning and deep learning approaches reported classification performance with area under the curve values between approximately 0.70 and 0.95. Approximately one-quarter of the studies (13/49, 26.5%) addressed early detection or prevention through longitudinal risk estimation or predictive modeling. Key limitations included small sample sizes, short monitoring durations, and limited external validation. Conclusions: Wearable-derived behavioral markers show promise for early risk stratification. This review advances the field by shifting from descriptive associations toward a digital phenotyping framework evaluating artificial intelligence–driven prediction in the preclinical window. Unlike prior reviews focused on established dementia, it differentiates direct predictive evidence from indirect correlational findings and critically assesses methodological maturity. Continuous, passive monitoring may enable scalable detection of subtle behavioral changes, supporting earlier and more personalized risk reduction strategies. Trial Registration: