White matter lesions on computed tomography of the head were studied in relation to neuropsychological functioning in subjects from a representative sample of non-demented (n = 134) and demented (n = 98) 85-year-olds. Non-demented subjects with white matter lesions (n = 46) scored significantly lower in tests of verbal ability (Synonyms), spatial ability (Block Design, Clock Test), perceptual speed (Identical forms), secondary memory (Thurstone Picture Memory), basic arithmetic (Coin Test) and the global cognitive screening test Mini-Mental State Examination than non-demented subjects without white matter lesions (n = 88). Demented subjects with white matter lesions (n = 67) scored significantly lower in tests of spatial ability (Block Design and Clock Test) and secondary memory (free recall in the MIR memory test, Ten-word memory test I and II) and in the Mini-Mental State Examination than demented subjects without white matter lesions (n = 31). It is concluded that white matter lesions contribute to cognitive decline in both non-demented and demented elderly subjects.