Subcortical brain systems play an important role in the regulation of a variety of cognitive and emotional processes. The basal ganglia and thalamus, along with the surrounding limbic structures, comprise MacLean’s paleomammalian brain, a region that serves to integrate appetitive drives with approach or avoidance to environmental stimuli. In humans, frontal–subcortical circuits comprise one of the major organizing neural networks in the brain. Discrete pathways connect prefrontal neurons sequentially to caudate, globus pallidus, dorsomedial thalamus, and finally back to the original prefrontal locus. These loop circuits process information supporting executive cognitive functions such as organization, motivation, and social comportment. This region of the brain receives its blood supply from relatively long, small-diameter, penetrating branches of the anterior and middle cerebral arteries. This unique circulatory arrangement is a consequence of the rapid evolutionary expansion of the neocortex and leaves these deep white and graymatter tissues vulnerable to ischemic injury and resulting neuropsychiatric dysfunction. Changes in subcortical white matter and deep gray matter nuclei are often noted in the brains of elderly people. Typically, these changes appear as foci of increased signal (hyperintensity) on T2-weighted magnetic resonance (MR) imaging or as areas of low density (attenuation) on computed tomography (CT) (Figure 1). Such changes were previously interpreted to reflect degeneration of the white matter typical of Binswanger’s disease. More recently, similar changes have been reported in patients with Alzheimer’s disease, in nondemented patients with cerebrovascular disease or psychiatric illness, and in apparently asymptomatic individuals. As a result, important questions are being raised about the frequency, pathophysiology, and potential clinical significance of these subcortical changes. Given the frequent use of brain MR imaging in neuropsychiatry, clinicians and neuroscientists are likely to encounter patients with changes in the subcortical white and gray matter. The purpose of this article is to review relevant data on the occurrence, etiology, and correlates (both clinical and neurobiological) of these subcortical changes. The potential implications of these changes for the pathophysiology of neuropsychiatric disorders will be discussed, with a particular focus on the relationship between subcortical brain changes and aging, cognitive function, and mood in older adults.