BackgroundWhite matter hyperintensities, a neuroimaging marker of small-vessel cerebrovascular disease and apolipoprotein ε4 (APOE4) allele, are important dementia risk factors. However, APOE4 as a key effect modifier in the relationship between white matter hyperintensities and grey matter volume needs further exploration.MethodsOne hundred ninety-two early-stage dementia (including mild cognitive impairment and mild dementia) and 259 cognitively unimpaired participants from a neurocognitive research cohort with neuroimaging data, APOE genotyping, and neuropsychological assessments were studied. We investigated independent and interactive effects of white matter hyperintensities and APOE4 on whole-brain voxel-wise grey matter volume using voxel-based morphometry (uncorrectedp< 0.001; minimum cluster size = 100 voxels). We further assessed interactive effects between APOE4 and white matter hyperintensities on global cognition, memory, and executive function in early-stage dementia and cognitively unimpaired participants.ResultsIndependent of APOE4 status, higher white matter hyperintensity load was associated with greater grey matter atrophy across frontal, parietal, temporal, and occipital lobes in cognitively unimpaired and early-stage dementia subjects. However, interaction analyses and independent sample analyses revealed that APOE4 non-carriers demonstrated greater white matter hyperintensity-associated grey matter atrophy compared to APOE4 carriers in both cognitively unimpaired and early-stage dementia groups. Additional confirmatory analyses among APOE4 non-carriers demonstrated that white matter hyperintensities resulted in widespread grey matter loss. Analyses of cognitive function demonstrated that higher white matter hyperintensity load was associated with worse global (Mini-Mental State Examination, Montreal Cognitive Assessment) and executive function (Color Trails 2) in APOE4 non-carriers compared to APOE4 carriers in early-stage dementia but not cognitively unimpaired participants.ConclusionsThe association between white matter hyperintensities and grey matter loss is more pronounced in APOE4 non-carriers than APOE4 carriers in the cognitively unimpaired and early-stage dementia stages. Furthermore, white matter hyperintensity presence results in poorer executive function in APOE4 non-carriers compared to APOE4 carriers. This finding may have significant impact on the design of clinical trials with disease modifying therapies.Supplementary InformationThe online version contains supplementary material available at 10.1186/s13195-023-01251-4.