Leuco-araiosis (LA) is a common finding in patients with stroke. The cause(s) of LA, risk factors and the clinical significance remains largely unknown. This prospective, community-based study of 1351 patients with acute stroke/TIA was undertaken to uncover factors of importance in the development of LA, and to assess the impact of LA on the prognosis of stroke. The diagnosis of LA was based on CT scan. Fifteen percent of the patients had LA. Age was the only factor that significantly increased the risk of LA (OR 2.4 per 10-year increase; 95% CI 1.8 to 3.1), whereas atrial fibrillation decreased the risk of LA (OR 0.26; 95% CI 0.13 to 0.52). Moderate daily alcohol consumption (one to five drinks) was associated with a reduced risk (OR 0.50; 95% CI 0.28 to 0.87), but more heavy alcohol consumption (more than five drinks) tended to increase the risk of LA (OR 1.3; 95% CI 0.5 to 3.3). LA did not influence the prognosis of stroke with regard to neurological outcome (p = 0.20), functional outcome (p = 0.47), length of hospital stay (p = 0.75), and mortality (p = 0.31). The relation between daily alcohol intake and LA seems to be U-shaped, like the relation between alcohol and coronary heart disease, alcohol and mortality, and alcohol and stroke. The presence of LA did not influence the outcome of stroke.