During the last 10 years, thanks to the development of sophisticated acquisition schemes and the application of novel image analysis and postprocessing, diffusion tensor (DT) magnetic resonance imaging (MRI) has increasingly been applied to the study of multiple sclerosis (MS). DT MRI proved to be able to detect and quantify tissue damage within and outside T2-visible MS lesions. In addition, DT MRI has been shown to be sensitive to the evolution of MS damage over short-term periods of time, and therefore holds promise to provide us with in vivo correlates of MS clinical severity, as well as predictors of long-term disease evolution. Recent developments of the technique, such as DT tractography, are likely to improve dramatically our understanding of the mechanisms associated to the accumulation of MS disability. Unresolved issues to be addressed include the definition of the actual features underlying diffusion changes in MS and the potential of DT MRI in the differential diagnosis between MS and other demyelinating conditions. The best acquisition and postprocessing strategies for DT MRI studies of MS also remain a matter of debate. Moreover, the precision and accuracy of DT MRI scans in detecting longitudinal, MS-related changes need to be further investigated. This is a pivotal issue for a future application of DT MRI to the monitoring of MS evolution in large-scale clinical trials and, possibly, in individual patients.