Accumulating data support axonal degeneration as the major determinant of irreversible neurological disability in patients with multiple sclerosis (MS). The extent of axonal injury correlates with the degree of inflammation in active MS lesions and occurs at early stages of disease, indicating that inflammatory demyelination is an important factor behind axon pathology at the relapsing-remitting stage of MS. Axonal loss from disease onset can remain clinically silent for many years, and permanent neurological disability develops when a threshold of axonal loss is reached and the CNS compensatory resources are exhausted. Lack of myelin-derived trophic support due to long term demyelination may cause continuous axonal degeneration in chronic inactive lesions at the secondary-progressive stage of MS. Axonal pathology is not limited to demyelinated lesions, but also extends into normal appearing white matter. The concept of MS as a neurodegenerative disorder has important clinical implications: First, proactive anti-inflammatory and immunomodulatory treatment should prevent or delay chronic disability since inflammation influences axonal injury. Second, the pathophysiological mechanisms underlying axonal degeneration in MS need to be clarified in order to develop novel neuroprotective therapeutics. Finally, surrogate markers of axonal pathology, such as N-acetyl aspartate, can be used to monitor axonal dysfunction, axonal loss and treatment efficiency in patients with MS.