Purpose: This study aims to investigate the different degeneration processes of categorical perception (CP) of Mandarin lexical tones in the normal aging population and the pathological aging population with mild cognitive impairment (MCI). Method: In Experiment I, we compared the identification and discrimination of Tone 1 and Tone 2 across young adults, seniors aged 60--65 years, and older seniors aged 75-80 years with normal cognitive abilities. In Experiment II, we compared lexical tone identification and discrimination across young adults, healthy seniors, and age-matched seniors with MCI. Results: In Experiment I, tone perception was intact in seniors aged below 65 years. Those aged above 75 years could also maintain normal tone identification, whereas they showed poorer tone discrimination correlated with age-related poorer hearing level. In Experiment II, healthy seniors showed normal CP of Mandarin tones. Tone identification was also normal in those with MCI, whereas their tone discrimination had significantly degenerated. Conclusions: In the normal aging population, age-related hearing loss decreased signal audibility, accounting for poorer discrimination of Mandarin lexical tones in seniors above 75 years. In the pathological aging population with MCI, the poorer discrimination of lexical tones may be attributed to the additive effect of age, hearing loss, and cognitive impairment (e.g., impaired working memory and long-term phonological memory). This study uncovered the roles of low-level sensory processing and high-level cognitive processing in lexical tone perception in the Chinese aging population.