Vestibular neuritis (VN) is characterised by acute vertigo due to a sudden loss of unilateral vestibular function. A considerable proportion of VN patients proceed to develop chronic symptoms of dizziness, including visually induced dizziness, specifically during head turns. Here we investigated whether the development of such poor clinical outcomes following VN, is associated with abnormal visuo-vestibular cortical processing. Accordingly, we applied functional magnetic resonance imaging to assess brain responses of chronic VN patients and compared these to controls during both congruent (co-directional) and incongruent (opposite directions) visuo-vestibular stimulation (i.e. emulating situations that provoke symptoms in patients). We observed a focal significant difference in BOLD signal in the primary visual cortex V1 between patients and controls in the congruent condition (small volume corrected level of p < .05 FWE). Importantly, this reduced BOLD signal in V1 was negatively correlated with functional status measured with validated clinical questionnaires. Our findings suggest that central compensation and in turn clinical outcomes in VN are partly mediated by adaptive mechanisms associated with the early visual cortex.