Deterioration of brain capillary flow and architecture is a hallmark of aging and dementia. It remains unclear how loss of brain pericytes in these conditions contributes to capillary dysfunction. Here, we conduct cause-and-effect studies by optically ablating pericytes in adult and aged mice in vivo. Focal pericyte loss induces capillary dilation without blood-brain barrier disruption. These abnormal dilations are exacerbated in the aged brain, and result in increased flow heterogeneity in capillary networks. A subset of affected capillaries experience reduced perfusion due to flow steal. Some capillaries stall in flow and regress, leading to loss of capillary connectivity. Remodeling of neighboring pericytes restores endothelial coverage and vascular tone within days. Pericyte remodeling is slower in the aged brain, resulting in regions of persistent capillary dilation. These findings link pericyte loss to disruption of capillary flow and structure. They also identify pericyte remodeling as a therapeutic target to preserve capillary flow dynamics.