This study aimed to evaluate the effect of brain atrophy on the functional outcome of patients with moderate-volume basal ganglia hemorrhage. Of 1003 patients with spontaneous intracerebral hemorrhage, 124 with moderate-volume basal ganglia hemorrhage (hematoma volume of 20–50 mL) were enrolled. The intercaudate distance (ICD) and sylvian fissure ratio (SFR) were used as linear brain atrophy parameters. The patients were divided into groups with favorable and unfavorable outcomes, according to the Glasgow Outcome Scale score, 90 days after symptom onset. Demographic and radiographic features, including the ICD and SFR, were compared between the two groups. Among the 124 patients, 74 (59.7%) exhibited a favorable outcome. The ICD and SFR values were significantly greater for the favorable group than for the unfavorable group. Multivariate analysis indicated that young age, high Glasgow Coma Scale score at admission, small hematoma volume, and increased ICD (odds ratio [OR], 1.207; 95% confidence interval [CI], 1.004–1.451) and SFR (OR, 1.046; 95% CI, 1.007–1.086, per 0.001) values had a beneficial effect on functional outcome. In conclusion, brain atrophy exhibits protective effects in patients with moderate-volume basal ganglia hemorrhage, and is an important factor for predicting functional outcome.