Brain atrophy is a relevant surrogate marker of the disease process in multiple sclerosis (MS) because it represents the net effect of various pathological processes leading to brain tissue loss. There are various approaches to quantifying central nervous system atrophy in MS. We have focused on a normalized measure of whole brain atrophy, the brain parenchymal fraction (BPF). BPF is defined as the brain parenchymal volume, divided by the volume within the surface of the brain. We applied this method to an MRI data set generated during a phase III clinical trial of interferon beta-1a (AVONEX). The purpose of the current study is to further explore clinical and MRI correlates of the BPF, particularly as they relate to relapse rate and Kurtzke's Expanded Disability Status Score (EDSS); and to further explore the therapeutic effects observed in interferon beta-1a recipients. Of all demographic and disease measures in the clinical trial data base, T2 lesion volume most closely correlated with BPF in cross sectional studies, and was the baseline factor most closely correlated with progressive brain atrophy in the subsequent 2 years. We also observed that change in T2 lesion volume was the disease measure most closely correlated with change in BPF during 2 years of observation. Of interest, relapse number and EDSS change during 2 years were only weakly correlated with BPF change during the same period. Disability progression, defined as sustained worsening of at least 1.0 EDSS points from baseline, persisting at least 6 months, was associated with significantly greater brain atrophy progression. We observed a therapeutic effect of interferon beta-1a in the second year of the clinical trial, and this beneficial effect was not accounted for by change in gadolinium enhanced lesion volume, or by corticosteroid medication within 40 days of the final MRI scan. The BPF is an informative surrogate marker for destructive pathological processes in relaping MS patients, and is useful in demonstrating treatment effects in controlled clinical trials. The significance of progressive brain atrophy during relapsing MS will be assessed by measuring clinical and MRI changes in prospective follow up studies.