White matter hyperintensity (WMH) volume is a neuroimaging marker of lesion load related to small vessel disease that has been associated with cognitive aging and Alzheimer's disease (AD) risk. The present study sought to examine whether regional WMH volume mediates the relationship between APOE ε4 status, a strong genetic risk factor for AD, and cognition and if this association is moderated by age group differences within a sample of 187 healthy older adults (APOE ε4 status [carrier/non-carrier] = 56/131). After we controlled for sex, education, and vascular risk factors, ANCOVA analyses revealed significant age group by APOE ε4 status interactions for right parietal and left temporal WMH volumes. Within the young-old group (50-69 years), ε4 carriers had greater right parietal and left temporal WMH volumes than non-carriers. However, in the old-old group (70-89 years), right parietal and left temporal WMH volumes were comparable across APOE ε4 groups. Further, within ε4 non-carriers, old-old adults had greater right parietal and left temporal WMH volumes than young-old adults, but there were no significant differences across age groups in ε4 carriers. Follow-up moderated mediation analyses revealed that, in the young-old, but not the old-old group, there were significant indirect effects of ε4 status on memory and executive functions through left temporal WMH volume. These findings suggest that, among healthy young-old adults, increased left temporal WMH volume, in the context of the ε4 allele, may represent an early marker of cognitive aging with the potential to lead to greater risk for AD.