Lyme disease is the most common vector-borne infectious disease in the United States. Post-treatment Lyme disease (PTLD) is a condition affecting 10–20% of patients in which symptoms persist despite antibiotic treatment. Cognitive complaints are common among those with PTLD, suggesting that brain changes are associated with the course of the illness. However, there has been a paucity of evidence to explain the cognitive difficulties expressed by patients with PTLD. This study administered a working memory task to a carefully screened group of 12 patients with well-characterized PTLD and 18 healthy controls while undergoing functional MRI (fMRI). A subset of 12 controls and all 12 PTLD participants also received diffusion tensor imaging (DTI) to measure white matter integrity. Clinical variables were also assessed and correlated with these multimodal MRI findings. On the working memory task, the patients with PTLD responded more slowly, but no less accurately, than did controls. FMRI activations were observed in expected regions by the controls, and to a lesser extent, by the PTLD participants. The PTLD group also hypoactivated several regions relevant to the task. Conversely, novel regions were activated by the PTLD group that were not observed in controls, suggesting a compensatory mechanism. Notably, three activations were located in white matter of the frontal lobe. DTI measures applied to these three regions of interest revealed that higher axial diffusivity correlated with fewer cognitive and neurological symptoms. Whole-brain DTI analyses revealed several frontal lobe regions in which higher axial diffusivity in the patients with PTLD correlated with longer duration of illness. Together, these results show that the brain is altered by PTLD, involving changes to white matter within the frontal lobe. Higher axial diffusivity may reflect white matter repair and healing over time, rather than pathology, and cognition appears to be dynamically affected throughout this repair process.