Subcortical white matter in the adult human brain contains a population of interneurons that helps regulate cerebral blood flow. We investigated the fate of these neurons following subcortical white matter demyelination. Immunohistochemistry was used to examine neurons in normal-appearing subcortical white matter and seven acute and 59 chronic demyelinated lesions in brains from nine patients with multiple sclerosis and four controls. Seven acute and 44 of 59 chronic multiple sclerosis lesions had marked neuronal loss. Compared to surrounding normal-appearing white matter, the remaining 15 chronic multiple sclerosis lesions contained a 72% increase in mature interneuron density, increased synaptic densities and cells with phenotypic characteristics of immature neurons. Lesion areas with increased neuron densities contained a morphologically distinct population of activated microglia. Subventricular zones contiguous with demyelinated lesions also contained an increase in cells with phenotypes of neuronal precursors. These results support neurogenesis in a subpopulation of demyelinated subcortical white matter lesions in multiple sclerosis brains.