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Iron overload is observed in neurodegenerative diseases, especially Alzheimer's disease (AD) and Parkinson's disease (PD). Homozygotes for the iron-overload (haemochromatosis) causing HFE p.C282Y variant have increased risk of dementia and PD. Whether brain iron deposition is causal or secondary to the neurodegenerative processes in the general population is unclear. We analysed 39,533 UK Biobank participants of European genetic ancestry with brain MRI data. We studied brain iron estimated by R2* and quantitative susceptibility mapping (QSM) in 8 subcortical regions: accumbens, amygdala, caudate, hippocampus, pallidum, putamen, substantia nigra, and thalamus. We performed genome-wide associations studies (GWAS) and used Mendelian Randomization (MR) methods to estimate the causal effect of brain iron on grey matter volume, and risk of AD, non-AD and PD. We also used MR to test whether genetic liability to AD or PD causally increased brain iron (R2* and QSM). In GWAS of R2* and QSM we replicated 83% of previously reported genetic loci and identified 174 further loci across all eight brain regions. Higher genetically predicted brain iron, using both R2* and QSM, was associated with lower grey matter volumes in the caudate, putamen and thalamus (e.g., Beta-putamenQSM: −0.37, p = 2*10–46). Higher genetically predicted thalamus R2* was associated with increased risk of non-AD dementia (OR 1.36(1.16;1.60), p = 2*10–4) but not AD (p > 0.05). In males, genetically predicted putamen R2* increased non-AD dementia risk, but not in females. Higher genetically predicted iron in the caudate, putamen, and substantia nigra was associated with an increased risk of PD (Odds Ratio QSM ∼ substantia-nigra 1.21(1.07;1.37), p = 0.003). Genetic liability to AD or PD was not associated with R2* or QSM in the dementia or PD-associated regions. Our genetic analysis supports a causal effect of higher iron deposition in specific subcortical brain regions for Parkinson's disease, grey matter volume, and non-Alzheimer's dementia. • Genetic evidence supports a causal relationship between higher brain iron with lower grey matter volumes in specific areas. • Higher genetically predicted thalamus R2* increased risk of non-Alzheimer's dementia only. • Higher genetically predicted iron in the caudate, putamen, and substantia nigra increased risk of Parkinson's disease. • Higher iron deposition in specific subcortical brain regions caused non-Alzheimer's dementia and Parkinson's disease. [ABSTRACT FROM AUTHOR]