Studies of newly-diagnosed epilepsy (NDE) will provide important insight into the underlying neurobiology in the early stages of epilepsy and development of imaging biomarkers for seizure and cognitive outcomes. However, patients with NDE are rarely studied using imaging techniques. This study investigated whether volumetric changes in subcortical nuclei are present in patients with newly diagnosed focal epilepsy (NDfE). 101 patients with NDfE and 40 healthy controls received T1-weighted MRI. Quantitative MRI volume measurements of the thalamus, caudate nucleus and putamen were performed. The left (p=0.001) and right (p=0.015) thalami were significantly smaller in patients relative to controls. Eleven patients (11%) had thalamic volumes below the ‘normal range’. There were no statistically significant differences between patients and controls in volume of the left (p=0.701) or right (p=0.546) putamen and left (p=0.328) or right (p=0.426) caudate nucleus. This study reports the first evidence for the presence of thalamic atrophy in patients with NDfE, and suggests that previously reported thalamic abnormalities in patients with refractory epilepsy are not necessarily due to the chronicity of the condition. Subcortical atrophy in patients with NDfE could structurally compromise patients at the point of diagnosis, predisposing these patients to seizures and cognitive dysfunction.