BACKGROUND: Despite widespread cortical involvement in Lewy body diseases, conventional gray matter magnetic resonance imaging (MRI) shows limited sensitivity. Diffusion-weighted MRI-derived microstructural measures have shown utility in Alzheimer's disease, but their application across the Lewy body disease spectrum remains limited. OBJECTIVES: The goal was to examine gray matter microstructure in 197 participants across the Lewy body disease spectrum (88 Lewy body dementia [LBD], 109 Parkinson's disease, and normal cognition [PD-NC]) and 46 controls. METHODS: Tissue-weighted neurite density index, tissue-weighted orientation dispersion index, and free water fraction were examined across 200 cortical and 32 subcortical regions. We compared these cross-sectionally between LBD, PD-NC and controls, and longitudinally over 3 years in a subset of 100 patients with Parkinson's disease cognitively intact at baseline. We assess associations with disease severity and plasma p-tau217 levels. RESULTS: LBD showed widespread cortical and subcortical increases in free water fraction and, to lesser extent, orientation dispersion compared to controls and PD-NC, despite minimal atrophy and no neurite density differences. In temporoparietal regions, increases in free water fraction and orientation dispersion correlated with cognitive, but not motor, severity, and with plasma p-tau217. Longitudinally, Parkinson's disease patients who developed cognitive impairment showed greater free water fraction increases within bilateral temporal regions, right thalamus, and right caudate. CONCLUSIONS: Diffusion-derived microstructural measures, particularly free water fraction are sensitive to early and progressive gray matter changes associated with cognitive decline in Lewy body diseases. Findings suggest microstructural disruption without overt neuronal loss and support free water fraction as a potential biomarker for disease staging and progression. © 2026 The Author(s). Movement Disorders published by Wiley Periodicals LLC on behalf of International Parkinson and Movement Disorder Society.