Narcolepsy type 1 is caused by a selective loss of hypothalamic hypocretin-producing neurons, resulting in severely disturbed sleep-wake control and cataplexy. Hypocretin-producing neurons project widely throughout the brain, influencing different neural networks. We assessed the extent of microstructural white matter organization and brain-wide structural connectivity abnormalities in a homogeneous group of twelve drug-free patients with narcolepsy type 1 and eleven matched healthy controls using diffusion tensor imaging with multimodal analysis techniques. First, tract-based spatial statistics (TBSS) was carried out using fractional anisotropy (FA) and mean, axial and radial diffusivity (MD, AD, RD). Second, quantitative analyses of mean FA, MD, AD and RD were conducted in predefined regions-of-interest, including sleep-wake regulation-related, limbic and reward system areas. Third, we performed hypothalamus-seeded tractography towards the thalamus, amygdala and midbrain. TBSS analyses yielded brain-wide significantly lower FA and higher RD in patients. Localized significantly lower FA and higher RD in the left ventral diencephalon and lower AD in the midbrain, were seen in patients. Lower FA was also found in patients in left hypothalamic fibers connecting with the midbrain. No significant MD and AD differences nor a correlation with disease duration were found. The brain-wide, localized ventral diencephalon (comprising the hypothalamus and different sleep- and motor-related nuclei) and hypothalamic connectivity differences clearly show a heretofore underestimated direct and/or indirect effect of hypocretin deficiency on microstructural white matter composition, presumably resulting from a combination of lower axonal density, lower myelination and/or greater axon diameter.