In acute ischemic stroke, critical hypoperfusion is a frequent cause of hypoxic tissue injury: As cerebral blood flow (CBF) falls below the ischemic threshold of 20 mL/100 mL/min, neurological symptoms develop and hypoxic tissue injury evolves within minutes or hours unless the oxygen supply is restored. But is ischemia the only hemodynamic source of hypoxic tissue injury? Reanalyses of the equations we traditionally use to describe the relation between CBF and tissue oxygenation suggest that capillary flow patterns are crucial for the efficient extraction of oxygen: without close capillary flow control, "functional shunts" tend to form and some of the blood's oxygen content in effect becomes inaccessible to tissue. This phenomenon raises several questions: Are there in fact two hemodynamic causes of tissue hypoxia: Limited blood supply (ischemia) and limited oxygen extraction due to capillary dysfunction? If so, how do we distinguish the two, experimentally and in patients? Do flow-metabolism coupling mechanisms adjust CBF to optimize tissue oxygenation when capillary dysfunction impairs oxygen extraction downstream? Cardiovascular risk factors such as age, hypertension, diabetes, hypercholesterolemia, and smoking increase the risk of both stroke and dementia. The capillary dysfunction phenomenon therefore forces us to consider whether changes in capillary morphology or blood rheology may play a role in the etiology of some stroke subtypes and in Alzheimer's disease. Here, we discuss whether certain disease characteristics suggest capillary dysfunction rather than primary flow-limiting vascular pathology and how capillary dysfunction may be imaged and managed.