While brain atrophy occurs early in the clinical course of multiple sclerosis, exactly how early, which tissues are affected and the rate at which early atrophy occurs are unclear. Regional brain atrophy was investigated in 58 patients recruited within 3 months of onset of a clinically isolated syndrome (CIS) suggestive of multiple sclerosis, who were followed-up for 3 years. At 3 years, 31 subjects had developed multiple sclerosis as defined by the McDonald criteria, while 27 had not (13 had MRI-visible brain lesions and 14 did not). In those who developed multiple sclerosis, the mean decrease in grey matter fractional volume (GMF, as a fraction of total intracranial volume) was -0.017 (-3.3%) and was significantly larger than in the combined lesion-positive and lesion-negative CIS subjects [-0.005 (-1.1%), P = 0.001]. No decrease in white matter fractional volumes (WMF) was seen. Change in GMF correlated only modestly with the change in T2 lesion volume from baseline to year 3 (r = -0.428, P = 0.004). These results suggest that progressive grey matter, but not white matter, atrophy is seen in the earliest clinically observable stages of relapse onset multiple sclerosis, and this is only moderately related to lesion accumulation. Longer-term follow-up is required to determine whether early grey matter atrophy is associated with subsequent disability or cognitive impairment.