Periventricular white-matter lesions were visualized in the brains of elderly patients being assessed for possible Alzheimer's disease. The magnitude of these lesions, expressed as lesion-brain ratios, correlated closely with the severity of dementia indicated by scores on the Blessed Dementia Scale and the Folstein Mini-Mental State Examination. Impairment in several domains of cognitive functioning tested by the Mini-Mental State Examination was also correlated with the relative quantity of periventricular lesions. Correlations were significant with systolic blood pressure, approached significance with age, and were not significant with duration of dementia or the magnitude of the lateral ventricles. These findings indicate the potential utility of structure-function correlations that are possible with magnetic resonance imaging in identifying mechanisms underlying dementia. They suggest that magnetic resonance imaging may be more useful than computed tomography in following the course of dementia.