Gray matter (GM) magnetic resonance imaging (MRI) T2 hypointensity, a putative marker of iron deposition, is a frequent finding in patients with clinically definite (CD) multiple sclerosis (MS). The objective of this study was to assess: (a) how early deep GM T2 hypointensity occurs in MS, by studying patients with clinically isolated syndromes (CIS) suggestive of MS, and (b) whether they contribute to predict subsequent evolution to CDMS. Dual-echo scans using two different acquisition protocols were acquired from 47 CIS patients and 13 healthy controls (HC). Normalized T2-intensity of the basal ganglia and thalamus was quantified. Patients were assessed clinically at the time of MRI acquisition and after three years. During the observation period, 18 patients (38%) evolved to CDMS. At the baseline, only the GM T2-intensity of the left caudate nucleus was significantly reduced in CIS patients in comparison with the HC (p = 0.04). At the baseline, the T2 intensity of the left caudate nucleus was significantly lower (p = 0.01) in CIS patients with disease dissemination in space (DIS), but not in those without DIS, compared to the HC. The baseline T2 lesion volume, but not GM T2 hypointensity, was associated with evolution to CDMS (hazard ratio = 1.60, 95% confidence interval (CI) = 1.05-2.42; p = 0.02). In CIS patients, deep GM is not spared, suggesting that iron-related changes and neurodegeneration occurs early. The magnitude of such damage is only minor and not associated with an increased risk of evolution to CDMS.