Background and Purpose— White matter hyperintensities (WMHs) are associated with progressive age-related cognitive decline and cardiovascular risk factors, but their biological relevance as indicators of generalized white matter injury is unclear. Diffusion tensor imaging provides more sensitive indications of subtle white matter disruption and can therefore clarify whether WMHs represent foci of generalized white matter damage that extends over a broader neighborhood. Methods— Two hundred eight participants from the University of California, Davis Alzheimer's Disease Center received a comprehensive clinical evaluation and brain MRI including fluid-attenuated inversion recovery and diffusion tensor imaging sequences. Voxelwise maps of WMHs were produced from fluid-attenuated inversion recovery using a standardized WMH detection protocol. Fractional anisotropy maps were calculated from diffusion tensor imaging. All WMH and fractional anisotropy maps were coregistered to a standardized space. For each normal-appearing white matter voxel in each subject fluid-attenuated inversion recovery scan, a neighborhood white matter injury score was calculated that increased with increasing number and proximity of WMH in the vicinity of the normal-appearing white matter voxel. Fractional anisotropy was related to neighborhood white matter injury using a nonlinear mixed effect model controlling for relevant confounding factors. Results— Fractional anisotropy was found to decrease as neighborhood white matter injury increased (β=−0.0017/%, P <0.0001) with an accelerated rate ( P <0.0001) for neighborhood white matter injury >0.4. An increase of 1% in neighborhood white matter injury score was associated with a decrease in mean fractional anisotropy of 0.012 ( P <0.001). Conclusions— WMH may represent foci of more widespread and subtle white matter changes rather than distinct, sharply delineated anatomic abnormalities. We use the term white matter hyperintensities penumbra to explain this phenomenon.