Hippocampal atrophy detected by MRI is a prominent feature of early Alzheimer's disease (AD), but it is likely that MRI underestimates the degree of hippocampal neuron loss, because reactive gliosis attenuates atrophy. We tested the hypothesis that hippocampal N-acetyl aspartate (NAA: a neuronal marker) and volume used together provide greater discrimination between AD and normal elderly than does either measure alone. We used proton MR spectroscopic imaging (1H MRSI) and tissue segmented and volumetric MR images to measure atrophy-corrected hippocampal NAA and volumes in 12 AD patients (mild to moderate severity) and 17 control subjects of comparable age. In AD, atrophy-corrected NAA from the hippocampal region was reduced by 15.5% on the right and 16.2% on the left (both p < 0.003), and hippocampal volumes were smaller by 20.1% (p < 0.003) on the right and 21.8% (p < 0.001) on the left when compared with control subjects. The NAA reductions and volume losses made independent contributions to the discrimination of AD patients from control subjects. When used separately, neither hippocampal NAA nor volume achieved to classify correctly AD patients better than 80%. When used together, however, the two measures correctly classified 90% of AD patients and 94% of control subjects. In conclusion, hippocampal NAA measured by 1H MRSI combined with quantitative measurements of hippocampal atrophy by MRI may improve diagnosis of AD.