Histopathologic studies report higher concentrations of multiple sclerosis white matter lesions in watershed areas of the brain, suggesting that areas with relatively lower oxygen levels may be more vulnerable to disease. However, it is unknown at what point in the disease course lesion predilection for watershed territories begins. Accordingly, we studied a cohort of people with newly diagnosed disease and asked whether (1) white matter lesions disproportionally localize to watershed-regions and (2) the degree of microstructural injury in watershed-lesions is more severe. Fifty-four participants, i.e. 38 newly diagnosed people with multiple sclerosis, clinically isolated syndrome or radiologically isolated syndrome, and 16 age- and sex-matched healthy controls underwent brain magnetic resonance imaging. T1-weighted and T2-weighted fluid-attenuated inversion recovery sequences, selective inversion recovery quantitative magnetisation transfer images, and the multi-compartment diffusion imaging with the spherical mean technique were acquired. We computed the macromolecular-to-free pool size ratio, and the apparent axonal volume fraction maps to indirectly estimate myelin and axonal integrity, respectively. We produced a flow territory atlas in each subject's native T2-weighted fluid-attenuated inversion recovery images using a T1-weighted magnetic resonance imaging template in the Montreal Neurological Institute 152 space. Lesion location relative to the watershed, non-watershed and mixed brain vascular territories was annotated. The same process was performed on the T2-weighted fluid-attenuated inversion recovery images of the healthy controls using 294 regions of interest. Generalized linear mixed models for continuous outcomes were used to assess differences in size, pool size ratio and axonal volume fraction between lesions/regions of interests (in healthy controls) situated in different vascular territories. In patients, we assessed 758 T2-lesions and 356 chronic black holes (cBHs). The watershed-territories had higher relative and absolute concentrations of T2-lesions (P≤0.041) and cBHs (P≤0.036) compared to either non-watershed- or mixed-zones. T2-lesions in watershed-areas also had lower pool size ratio relative to T2-lesions in either non-watershed- or mixed-zones (P = 0.039). These results retained significance in the sub-cohort of people without vascular comorbidities and when accounting for periventricular lesions. In healthy controls, axonal volume fraction was higher only in mixed-areas regions of interest compared to non-watershed-ones (P = 0.008). No differences in pool size ratio were seen. We provide in vivo evidence that there is an association between arterial vascularisation of the brain and multiple sclerosis-induced tissue injury as early as the time of disease diagnosis. Our findings underline the importance of oxygen delivery and healthy arterial vascularisation to prevent lesion formation and foster a better outcome in multiple sclerosis.