Multiple sclerosis (MS) is an inflammatory demyelinating disease of the central nervous system. Recent evidence suggests that dysfunction of surviving demyelinated axons and axonal degeneration contribute to the progression of MS. We review the evidence for and potential mechanisms of degeneration as well as dysfunction of chronically demyelinated axons in MS with particular reference to mitochondria, the main source of adenosine-5′-triphosphate in axons. Besides adenosine-5′-triphosphate production, mitochondria play an important role in calcium handling and produce reactive oxygen species. The mitochondrial changes in axons lacking healthy myelin sheaths as well as redistribution of sodium channels suggest that demyelinated axons would be more vulnerable to energy deficit than myelinated axons. A dysfunction of mitochondria in lesions as well as in the normal-appearing white and grey matter is increasingly recognized in MS and could be an important determinant of axonal dysfunction and degeneration. Mitochondria are a potential therapeutic target in MS.