Correlation studies between various conventional and non-conventional MRI parameters and cognitive impairment in the early stages of multiple sclerosis (MS) are lacking, although it is known that a number of patients with early MS have mild cognitive impairment. Our aim was to explore whether this cognitive impairment is dependent on the extent and severity of the burden of disease, diffuse microscopic brain damage or both. We studied 63 patients with clinically definite relapsing-remitting (RR) MS, duration of disease 1-10 years and Expanded disability status scale scores < or = 5.0. Mean age was 35.4 years, mean duration of disease 5.8 years and median EDSS score 1.5. Neuropsychological performance, psychological function, neurological impairment and disability were assessed. The patients also underwent MRI, including magnetisation-transfer (MT) studies. We quantified the lesion load on T2- and T1-weighted images, the magnetisation transfer ratio (MTR) of normal-appearing brain tissue (NABT) and the brain parenchymal fraction (BPF). No significant difference was found between lesion loads in patients with and without cognitive impairment. In 15 patients (23.8%) with overall cognitive impairment, median BPF and average NABT MTR were significantly lower than those in patients without cognitive impairment (0.868 vs 0.892, P = 0.02 and 28.3 vs 29.7 P = 0.046, respectively). Multiple regression analysis models demonstrated that the only variables independently correlated with cognitive impairment were: BPF (R = 0.89, P = 0.001) and average NABT MTR (R = 0.76, P = 0.012). Our findings support the hypothesis that, cognitive decline in patients with MS, a low disability score and short duration of disease is directly associated with the extent and severity of diffuse brain damage. The loss of brain parenchyma did not correlate with the severity of microscopic damage in the NABT, indicating that the two processes could be distinct in the early stages of the disease.