Objective The hippocampus is a key area for episodic memory processes. Hippocampal atrophy is a hallmark feature of Alzheimer's disease (AD). We used a new and automatized morphometric technique to better characterize brain atrophy in subjects with different levels of cognitive deficit. Methods In this study 21 participants with Mild Cognitive Impairment (MCI), 12 patients with early AD and 29 elderly control subjects were subjected to high resolution MRI and a neuropsychological test battery. Brain volume across participants, measured by voxel-based morphometry (VBM), was correlated with verbal memory capacity, measured with a verbal memory test (VLMT). Results Atrophy in the anterior hippocampus, the ento- and perirhinal cortex as well as the parahippocampal gyrus, middle temporal gyrus and anterior cingulate cortex correlated closely with episodic memory performance. Conclusions These brain areas are known to subserve episodic encoding of verbal material. The data contribute to a better understanding of atrophic brain processes in subjects at risk for AD. A combination of neuropsychological testing and voxel-based morphometry may serve as a diagnostic tool in the future. Copyright (C) 2008 John Wiley & Sons, Ltd.