In this study, 12 patients over age 60 with depression with moderate to severe subcortical hyperintensities (SH) localized to the periventricular white matter were identified by quantitative MRI. Using the California Verbal Learning Test, they were compared with 12 age-, education-, and severity-matched patients with depression with minimal white matter changes on specific aspects of memory performance. Patients with cortical lesions, neurologic or systemic illness affecting cognition, and history of substance abuse were excluded. Patients in the group with high SH showed reduced use of semantic encoding strategies (p < 0.05), reduced learning efficiency (p < 0.05), and a greater discrepancy between free recall and recognition discriminability (p < 0.05) than their low SH counterparts. This pattern of performance on memory tasks is similar to that found in previous studies to be associated with subcortical degenerative disorders such as Huntington's and Parkinson's diseases. Geriatric patients with depression with SH may represent a subgroup with greater subcortical involvement, with associated cognitive and functional decline.