Cerebral involvement in multiple sclerosis may result not only in sensory and motor symptoms but also in impaired mentation. We hypothesize that cognitive dysfunction occurs due to cortical deafferentation or disconnection arising from subcortical white-matter disease. We examined the P300 event-related potential in 31 patients with multiple sclerosis, correlating it with disease severity ratings based on magnetic resonance imaging signal intensity changes, cognitive dysfunction, and disability status. The patients with multiple sclerosis exhibited significantly prolonged P300 wave latencies compared with 32 control subjects. The P300 latency was strongly correlated with the presence of demyelinative brain lesions seen on magnetic resonance imaging scans and with cognitive impairment, but was only weakly associated with the Kurtzke disability status score, consistent with this scale primarily reflecting spinal rather than cerebral demyelination. Our study results support a relationship between subcortical white-matter lesions and cognitive impairment in multiple sclerosis.