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Highlights • icobrain dm is an automated brain MRI segmentation faster than Freesurfer. • Significantly higher accuracy was obtained for several brain structures, including hippocampus. • icobrain dm volumes had a test-retest error below normal annual atrophy rates. • icobrain dm temporal lobe volume had highest sensitivity in discriminating Alzheimer's., Brain volumes computed from magnetic resonance images have potential for assisting with the diagnosis of individual dementia patients, provided that they have low measurement error and high reliability. In this paper we describe and validate icobrain dm, an automatic tool that segments brain structures that are relevant for differential diagnosis of dementia, such as the hippocampi and cerebral lobes. Experiments were conducted in comparison to the widely used FreeSurfer software. The hippocampus segmentations were compared against manual segmentations, with significantly higher Dice coefficients obtained with icobrain dm (25–75th quantiles: 0.86–0.88) than with FreeSurfer (25–75th quantiles: 0.80–0.83). Other brain structures were also compared against manual delineations, with icobrain dm showing lower volumetric errors overall. Test-retest experiments show that the precision of all measurements is higher for icobrain dm than for FreeSurfer except for the parietal cortex volume. Finally, when comparing volumes obtained from Alzheimer's disease patients against age-matched healthy controls, all measures achieved high diagnostic performance levels when discriminating patients from cognitively healthy controls, with the temporal cortex volume measured by icobrain dm reaching the highest diagnostic performance level (area under the receiver operating characteristic curve = 0.99) in this dataset.