Background Cerebrovascular disease and neurodegeneration cause cognitive impairment and frequently coexist. Aims Our objectives were to investigate the prevalence and cognitive impact of medial temporal lobe atrophy – a radiological marker often associated with Alzheimer's disease – in a hospital stroke service. Methods Retrospective cohort study of patients from a hospital stroke service. Patients assessed for suspected ischemic stroke or transient ischemic attack, irrespective of final diagnosis, underwent neuropsychological testing and magnetic resonance imaging. medial temporal lobe atrophy, white matter hyperintensities, lacunes, and cerebral microbleeds were rated using established criteria and validated scales. The associations between medial temporal lobe atrophy and cognition were tested using multivariable logistic regression analyses, adjusted for age and imaging markers of cerebrovascular disease. Results Three hundred and ninety-three patients were included, of whom 169 (43%; 95% confidence interval: 38·1–48·1%) had medial temporal lobe atrophy; in 38 patients (9·7%), medial temporal lobe atrophy was severe (mean score ≥2). In unadjusted logistic regression analyses in the whole cohort, mean medial temporal lobe atrophy score was associated with verbal memory, nominal and perceptual skills, executive function, and speed and attention. After adjustment for age, white matter hyperintensities, number of lacunes, presence of cerebral microbleeds, previous ischemic stroke or transient ischemic attack, and premorbid intelligence quotient, mean medial temporal lobe atrophy score remained associated with impairment in verbal memory (odds ratio: 1·64; 95% confidence interval 1·04–2·58) and nominal skills (odds ratio: 1·61; 95% confidence interval 1·04–2·48). Conclusions Medial temporal lobe atrophy is common and has an independent impact on cognitive function in a stroke service population, independent of confounding factors including age and magnetic resonance imaging markers of cerebrovascular disease. Medial temporal lobe atrophy is independently related to verbal memory and nominal skills, while small vessel pathology also contributes to speed and attention, and executive and perceptual functions.