Diffusion-weighted imaging (DWI) is a powerful new magnetic resonance imaging technique for evaluating tissue pathophysiology in vivo. We performed DWI in three orthogonal spatial directions in 10 patients with mild to moderate Alzheimer's disease (AD) and 11 control subjects. Average apparent diffusion coefficients (ADCavg) were calculated for gray matter regions, and anisotropy indexes were calculated for white matter regions. Global measures of atrophy and white matter hyperintensities (WMH) were obtained on T2-weighted images to control for their potential confounding effects on ADCavg and anisotropy. The measures of atrophy and WMH differed between the groups and were used as covariates in the subsequent statistical analyses. Patients with AD demonstrated diminished anisotropy in the posterior white matter (p < 0.0001) and increased ADCavg in the hippocampus (p < 0.05) when compared to the control group. Diffusion measures did not correlate with the severity of dementia. DWI provides a unique, quantitative parameter that may be sensitive to the pathophysiological and/or microstructural abnormalities that occur in AD.