Objectives To examine longitudinal changes in structural and functional connectivity post-stroke in patients with motor impairment, and define their importance for recovery and outcome at 12 months. Methods First-time stroke patients (N = 31) were studied at 1–2 weeks, 3 months, and 12 months post-injury with a validated motor battery and resting-state fMRI to measure inter-hemispheric functional connectivity (FC). Fractional anisotropy (FA) of the cortico-spinal tract (CST) was derived from diffusion tensor imaging as a measure of white matter organization. ANOVAs were used to test for changes in FC, FA, and motor performance scores over time, and regression analysis related motor outcome to clinical and neuroimaging variables. Results FA of the ipsilesional CST improved significantly from 3 to 12 months and was strongly correlated with motor performance. FA improved even in the absence of direct damage to the CST. Inter-hemispheric FC also improved over time, but did not correlate with motor performance at 12 months. Clinical variables (early motor score, education level, and age) predicted 80.4% of the variation of motor outcome, and FA increased the predictability to 84.6%. FC did not contribute to the prediction of motor outcome. Conclusions Stroke causes changes to the CST microstructure that can account for behavioral variability even in the absence of demonstrable lesion. Ipsilesional CST undergoes remodeling post-stroke, even past the three-month window when most of the motor recovery happens. FA of the CST, but not inter-hemispheric FC, can improve to the prediction of motor outcome based on early motor scores.