Vascular dementia is a heterogeneous syndrome resulting from large vessel disease or small vessel disease. Multi-infarct dementia (MID) is due to large vessel disease, and is characterized by multiple cortical infarctions and motor disabilities. Prompt treatment during the acute stage for stroke and appropriate strategies for stroke recurrence are pivotal for the prevention of MID. In contrast, subcortical ischemic vascular dementia (SIVD) is caused by small artery disease. Patients with SIVD may show abulia, apathy, and a loss of verbal fluency and executive function, but the amnesia is less severe as compared to those with Alzheimers disease. These patients do not necessarily exhibit a stroke episode, and may eventually evolve from a latent condition with vascular mild cognitive impairment (MCI-V) and radiological abnormalities such as extensive cerebrovascular white matter lesions (WMLs). These lesions consist pathologically of a dilatation of the perivascular space, gliosis, demyelination and incomplete infarction of the cerebral white matter. Their clinical significance has remained unclear for a long time, since WMLs are frequently observed in elderly asymptomatic subjects. However, recent studies indicate that these lesions are predictors of a future risk of stroke and dementia. This review discusses the diagnosis, treatment and prevention of vascular dementia. The recent advances in neuroimaging techniques which may enable the identification of patients susceptible to developing vascular dementia and motor disabilities among the population with extensive WMLs are also described.