Vascular dementia (VaD) includes several different vascular mechanisms and changes in the brain, and has different causes and clinical manifestations. Critical to its conceptualization and diagnosis are definitions of the cognitive syndrome, vascular etiologies, and changes in the brain. Variation in these has resulted in different definitions of VaD, estimates of prevalence, and types and distribution of brain lesions. This definitional heterogeneity may have been a factor for negative results in prior clinical trials on VaD. We propose that the division of VaD into subtypes can identify a more homogeneous group of patients for drug trials. A so-called "subcortical" VaD could incorporate two old clinical entities "Binswanger's disease" and "the lacunar state." Small vessel disease is the primary vascular etiology, lacunar infarcts and ischemic white matter lesions are the primary type of brain lesions, the subcortical areas and frontal connections are the primary location of lesions, and a subcortical syndrome as the primary clinical manifestation. The clinical syndromes are likely more variable, and urgently need to be categorized. Selection of these patients for clinical trials could mainly be based on brain imaging features, where the essential changes and the main aspects of the lesions include extensive ischemic white matter lesions and lacunar infarcts in the deep gray and white matter structures. Subcortical VaD is expected to show a more predictable clinical picture, natural history, outcomes, and treatment responses.