This article introduces an automated method for the computation of changes in brain volume from sequential magnetic resonance images (MRIs) using an iterative principal component analysis (IPCA) and demonstrates its ability to characterize whole-brain atrophy rates in patients with Alzheimer's disease (AD). The IPCA considers the voxel intensity pairs from coregistered MRIs and identifies those pairs a sufficiently large distance away from the iteratively determined PCA major axis. Analyses of simulated and real MRI data support the underlying assumption of a linear relationship in paired voxel intensities, identify an outlier distance threshold that optimizes the trade-off between sensitivity and specificity in the detection of small volume changes while accounting for global intensity changes, and demonstrate an ability to detect changes as small as 0.04% of brain volume without confounding effects of between-scan shifts in voxel intensity. In eight patients with probable AD and eight age-matched normal control subjects, the IPCA was comparable to the established but partly manual digital subtraction (DS) method in characterizing annual rates of whole-brain atrophy: resulting rates were correlated (Spearman rank correlation = 0.94, P < 0.0005) and comparable in distinguishing probable AD from normal aging (IPCA-detected atrophy rates: 2.17 +/- 0.52% per year in the patients vs. 0.41 +/- 0.22% per year in the controls [Wilcoxon-Mann-Whitney test P = 7.8 x 10(-4)]; DS-detected atrophy rates: 3.51 +/- 1.31% per year in the patients vs. 0.48 +/- 0.29% per year in the controls [P = 7.8 x 10(-4)]). The IPCA could be used in tracking the progression of AD, evaluating the disease-modifying effects of putative treatments, and investigating the course of other normal and pathological changes in brain morphology.