Periventricular white matter hyperintensities (PVHs) seen on T2 weighted MRI studies are common in elderly people and often represent demyelination of fibres. Damage to these fibres could lead to functional disconnection between brain regions. Electroencephalographic coherence, a measure of shared electrical activity between regions, was examined to determine if there was evidence for such disconnection. Twenty two subjects with clinically diagnosed dementia of the Alzheimer's type, 16 with multi-infarct dementia, and 18 normal controls were studied. It was hypothesised that coherence between areas presumably linked by fibres that traverse the periventricular region would be decreased in subjects with PVHs, and that PVHs would have a stronger association with decreased coherence than clinical diagnosis. It was also hypothesised that coherence between areas presumably connected by long corticocortical tracts that are neuroanatomically separated from the ventricles would be low in patients with Alzheimer's disease because of pyramidal cell death in this group, but would not be affected by the presence of PVHs. Patients with PVHs in fact had lower coherence than those without PVHs in the pre-Rolandic and post-Rolandic areas, where connecting fibres traverse the periventricular region. There was no effect of PVHs, however, on coherence between areas separated by the Rolandic fissure that were connected by long corticocortical tracts; this coherence was lowest among the patients with Alzheimer's disease. These patterns of association suggest that coherence may detect different types of neurophysiological "disconnection," and may be sensitive to selective damage to different fibre pathways.