White matter hyperintensities (WMHs) on magnetic resonance imaging are commonly found in older adults. The mechanisms underpinning the dose-dependent association between WMH severity and cognition are not well understood. This study aimed to investigate how brain activity changes with WMH severity, and if altered brain activity mediates the relationship between WMH and cognitive function. A total of 35 participants with moderate to severe WMHs (Fazekas grade 2 or 3) and 34 participants with mild WMHs (Fazekas grade 1), who were cognitively normal, were included. Resting-state brain function was analyzed using the amplitude of low-frequency fluctuation (ALFF). A mean fractional anisotropy (FA) value of 20 tract-specific regions of interest was calculated. Mediation analysis was used to assess whether ALFF values mediated the relationship between WMH and cognition. The results showed that compared to those with mild WMHs, participants with confluent WMHs had worse memory and naming ability and also had increased ALFF in the right middle frontal gyrus and decreased ALFF in the left middle occipital gyrus. After controlling for age, gender, education and apolipoprotein E (ApoE) ε4 status, increased ALFF in the right prefrontal cortex was associated with worse immediate recall and recognition, and ALFF values mediated the relationships between both Fazekas scores and FA values and memory. In conclusion, our study suggests that cognitively normal adults with high WMH load exhibit subclinical cognitive dysfunction and altered spontaneous brain activity. The mediating effects of brain activity help to shed light on our understanding of the relationship between WMHs and cognition.© 2021. The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature.