Essential tremor (ET) is the second most common movement disorder; however, the pathophysiological mechanism of ET is unclear. We aimed to investigate the microstructural degeneration of gray matter (GM) and white matter (WM) and their correlations with cognition and tremor in patients with ET. The participants were 63 patients with ET and 63 matched healthy controls (HCs) who underwent 3D-T1 weighted and diffusion kurtosis images (DKI). Microstructural degeneration was measured using high-level diffusion parameters derived from DKI. A voxel-wise analysis of the means of the GM-based spatial statistics and tract-based spatial statistics were conducted to assess differences in diffusion parameters between the ET and HC groups. The volume differences between the two groups were also assessed, and tremor severity and multi-domain cognitive performance were evaluated. Finally, the relationship between microstructural degeneration and clinical characteristics were assessed. The ET group had significantly lower mean kurtosis of the temporal, parietal, and occipital lobes and the cerebellum and lower radial kurtosis in several tracts. These microstructural changes in GM and WM were correlated with tremor and cognitive scores. However, no significant difference in volume was found between the groups. Our findings suggest that ET entails extensive GM and WM microstructural alterations, which support the neurodegenerative hypothesis of ET. Our study contributes to a better understanding of the mechanisms underlying tremor and cognitive impairment in ET.