Abnormal iron deposition occurs in the brains of patients with multiple sclerosis (MS) and may cause MRI T2 shortening ('black T2'; BT2). The frequency, distribution and clinical significance of BT2 in MS is unknown. Analysis of brain MRI scans of 114 MS patients showed BT2 in thalamus (n = 65; 57%), putamen (n = 48; 42%), caudate (n = 27; 24%) and Rolandic cortex (n = 9; 8%). BT2 was significantly related to longer disease duration and advancing neurological disability. Wheelchair-bound patients had worse BT2 in thalamus (p < 0.05), putamen (p < 0.001) and Rolandic cortex (p < 0.05). Patients with secondary progressive disease (n = 34) had worse BT2 in thalamus, putamen and caudate (all p < 0.05) than those with relapsing remitting disease (n = 80). BT2 is proposed as a clinically relevant finding relating to neuronal degeneration in MS.