The literature regarding Binswanger's disease is reviewed. Emphasis is placed on reviewing the neuropsychological literature related to Binswanger's disease. In addition, a retrospective analysis was carried out among four groups of subjects (N = 61) who were divided according to the presence or absence of dementia and deep white-matter alterations. A main effect for deep white-matter alterations was found for almost all measures of diastolic and systolic blood pressure. Among the two nondemented groups there was an effect of deep white matter alteration on neuropsychological functioning. Subjects with deep white matter changes performed worse on tests of immediate and delayed recall of a prose passage. Among the two demented groups there were no differences on any of the neuropsychological measures, although subjects with deep white matter alterations exhibited a higher incidence of focal neurologic signs and stroke. We conclude that Binswanger's disease is probably more prevalent than currently appreciated. Also, among clinically nondemented individuals periventricular white-matter alterations may be associated with subtle but definable neuropsychological deficits, and these individuals may be at risk for developing a dementing illness.