Neuropsychological impairment is a common feature of multiple sclerosis. Affected patients often have deficits in information-processing speed and memory and exhibit psychopathological states such as depression. A minority of patients have rarer affect/mood disorders such as euphoria sclerotica and pathological laughter/crying. Neuropsychological impairment is a major predictor of low quality of life, unemployment, and caregiver distress. Studies evaluating correlations between neuropsychological impairment and findings on magnetic resonance imaging show that neuropsychological dysfunction is associated with lesion burden and diffuse disease in normal-appearing brain tissue. However, measures of tissue atrophy including whole-brain and central atrophy are especially well correlated with and predictive of cognitive impairment. Moreover, recent studies have shown that conventional measures of brain atrophy explain more variance in neuropsychological dysfunction than do measures of lesion burden. In particular, neuropsychological outcomes correspond highly with linear measures of subcortical atrophy such as ventricle enlargement. Within the domain of emotional dysfunction, both lesion burden and atrophy are related to major depressive disorder. Brain atrophy also predicts euphoria and disinhibition. The preliminary data suggest that although lesion burden primarily predicts depressive disorder, both lesion burden and atrophy predict the presence of euphoria. Euphoria and disinhibition likely represent personality change associated with worsening cognition as the disease progresses. Taken together, this growing body of data on magnetic resonance imaging to neuropsychological correlations supports the clinical relevance and validity of brain atrophy as a measure of disease progression in multiple sclerosis. Continuing research focuses on the possible relationship between measures of regional brain atrophy and cognitive and emotional impairment.