In patients who present with clinically isolated syndromes suggestive of multiple sclerosis, interferon beta-1a is effective in delaying evolution to clinically definite disease and in reducing MRI-measured disease activity. We aimed to assess whether this drug can also reduce the rate of brain volume decrease in such patients enrolled in the ETOMS (early treatment of multiple sclerosis) trial. MRI data for brain volume measurements at baseline, month 12, and month 24 were available from 131, 111, and 112 patients assigned treatment (22 microg interferon beta-1a), and 132, 98, and 99 patients assigned placebo respectively. Normalised brain parenchymal volume (NBV) at baseline and percentage brain volume changes (PBVC) were measured with a fully-automated segmentation technique. The primary endpoint was conversion to clinically definite multiple sclerosis due to clinical relapse. Analysis was by intention to treat. 41 (31%) of 131 patients on interferon beta-1a and 62 (47%) of 132 on placebo converted to clinically definite multiple sclerosis (odds ratio 0.52 [95% CI 0.31-0.86], p=0.0115). Mean PBVC for patients on placebo was -0.83% during the first year, -0.67% during the second year, and -1.68% during the entire study period. Respective values for treated patients were -0.62%, -0.61%, and -1.18%. The changes in brain volume were significant in both groups at all timepoints. A significant treatment effect was detected for month 24 versus baseline values (p=0.0031). The number of new T2 lesions formed during the first year correlated weakly with PBVC during the second year. Early treatment with interferon beta-1a is effective in reducing conversion to clinically definite multiple sclerosis and in slowing progressive loss of brain tissue in patients with clinically isolated syndromes. The modest correlation between new lesion formation and brain volume decrease suggests that inflammatory and neurodegenerative processes are, at least partly, dissociated from the earliest clinical stage of multiple sclerosis onwards.