Diffuse white-matter disease associated with small-vessel disease and dementia is prevalent in the elderly. The biological mechanisms, however, remain elusive. Using pericyte-deficient mice, magnetic resonance imaging, viral-based tract-tracing, and behavior and tissue analysis, we found that pericyte degeneration disrupted white-matter microcirculation, resulting in an accumulation of toxic blood-derived fibrin(ogen) deposits and blood-flow reductions, which triggered a loss of myelin, axons and oligodendrocytes. This disrupted brain circuits, leading to white-matter functional deficits before neuronal loss occurs. Fibrinogen and fibrin fibrils initiated autophagy-dependent cell death in oligodendrocyte and pericyte cultures, whereas pharmacological and genetic manipulations of systemic fibrinogen levels in pericyte-deficient, but not control mice, influenced the degree of white-matter fibrin(ogen) deposition, pericyte degeneration, vascular pathology and white-matter changes. Thus, our data indicate that pericytes control white-matter structure and function, which has implications for the pathogenesis and treatment of human white-matter disease associated with small-vessel disease.