Abstract Objectives Brain white matter (WM) microstructural changes evaluated by diffusion MRI are well documented in patients with SLE. Yet, the conventional diffusion tensor imaging technique fails to differentiate WM changes that originate from tissue alterations from those due to increased extracellular free water (FW) related to neuroinflammation, microvascular disruption, atrophy, or other extracellular processes. Here, we sought to delineate changes in WM tissue microstructure and extracellular FW volume and examine their relationships with neurocognitive function in SLE patients. Methods Twenty SLE patients [16 females, aged 36.0 (10.6)] without clinically overt neuropsychiatric manifestation and 61 healthy controls (HCs) [29 females, aged 29.2 (9.4)] underwent diffusion MRI and computerized neuropsychological assessments cross-sectionally. The FW imaging method was applied to compare microstructural tissue changes and extracellular FW volume of the brain WM between SLE patients and HCs. Association between extracellular FW changes and neurocognitive performance was studied. Results SLE patients had higher WM extracellular FW compared with HCs (family-wise-error-corrected P < 0.05), while no group difference was found in FW-corrected tissue compartment and structural connectivity metrics. Extracellular FW increases in SLE patients were associated with poorer neurocognitive performance that probed sustained attention (P = 0.022) and higher cumulative glucocorticoid dose (P = 0.0041). Such findings remained robust after controlling for age, gender, intelligence quotient, and total WM volume. Conclusion The association between WM extracellular FW increases and reduced neurocognitive performance suggest possible microvascular degradation and/or neuroinflammation in SLE patients with clinically inactive disease. The mechanistic impact of cumulative glucocorticoids on WM FW deserves further evaluation.