White matter hyperintensities (WMHs) are frequently observed on MRI scans of elderly nondemented people and have been associated in the past with cognitive impairment and physical dysfunction. Individual differences in the prevalence and severity of WMHs have been documented and more recently we reported on the significant contribution of genetic influences to this variability. The objective of the present study was to further investigate, in the context of a behavioral genetic paradigm, the nature of the association between WMHs and cognitive and physical function. MRI brain scans and a battery of neuropsychological and physical function tests were given to 142 male-male twin pairs [72 monozygotic (MZ) and 70 dizygotic (DZ)], participants in the 4th exam of the NHLBI Twin Study. Biometric genetic modeling was used to estimate the genetic and/or environmental covariation between WMHs and cognitive and physical summary scores. The phenotypic association between WMHs and cognitive function in this sample of twins was modest but statistically significant. Genetic analyses of cognitive and physical function summary scores found that 55% to 70% of the observed variability was due to genetic influences. A further decomposition of the phenotypic association between WMHs and cognitive function found that 70% to 100% of the phenotypic covariation was due to common genetic effects. Similar results explained the association between WMHs and performance on two physical function tests. We conclude from these analyses that common genetic influences explain to a large extent previously observed phenotypic associations between large amounts of WMHs and poor cognitive and physical function in the elderly.