Functional MRI is a non-invasive imaging technology that can illuminate regional brain activity during the performance of a task, such as a memory paradigm, or at rest. fMRI data can be acquired during a session in which MRI data is also acquired to measure grey and white matter regional brain structure, and these measures can be analyzed together to investigate the relationships between altered regional brain function, structure, and cognitive task performance in neurologic illness. Data will be reviewed on the application of fMRI to the early detection of physiologic abnormalities associated with neurodegenerative diseases that cause dementia, and to differential diagnosis of dementias. Recent fMRI work will also be reviewed on the identification of abnormalities in regional brain function prior to dementia, the use of these measures to predict cognitive decline, and their application in investigations of alterations in regional brain networks that subserve cognitive function. Finally, the use of fMRI as a biomarker in clinical trials of putative neurotherapeutics for dementias will be discussed.