The psychological deficits associated with Parkinson’s disease vary across individuals and change across time, with implications for prognosis and treatment. Key outstanding challenges are to define the distinct behavioural phenotypes of this disorder and develop diagnostic paradigms that can assess these sensitively in individuals. In a previous study we measured different aspects of attentional control in Parkinson’s disease using an established fMRI switching paradigm (Gruszka et al., 2017). We observed no deficits for the aspects of attention the task was designed to examine; instead those with Parkinson’s disease learnt the operational requirements of the task more slowly. We hypothesised that a subset of people with early to mid-stage Parkinson’s might be impaired when encoding rules for performing new tasks. Here, we directly test this hypothesis and investigate whether deficits in instruction based learning represent a potential phenotype. Seventeen participants with Parkinson’s disease (8 male; mean age: 61.2 years), eighteen older adults (8 male; mean age: 61.3 years) and twenty younger adults (10 males; mean age: 26.7 years) undertook a simple instruction based learning paradigm in the MRI scanner. They sorted sequences of coloured shapes according to binary discrimination rules that were updated at two-minute intervals. Unlike common reinforcement learning tasks, the rules were unambiguous, being explicitly presented; consequently, there was no requirement to monitor feedback or estimate contingencies. Despite its simplicity, a third of the Parkinson’s group, but only one older adult, showed marked increases in errors, 4SD greater than the worst-performing young adult. The pattern of errors was consistent, reflecting a tendency to misbind discrimination rules. The misbinding behaviour was coupled with reduced frontal, parietal and anterior caudate activity when rules were being encoded, but not when attention was initially oriented to the instruction slides or when discrimination trials were performed. Concomitantly, Magnetic Resonance Spectroscopy showed reduced gamma-Aminobutyric acid (GABA) levels within the mid-dorsolateral prefrontal cortices of individuals who made misbinding errors. These results demonstrate, for the first time, that a subset of early to mid-stage people with Parkinson’s have substantial deficits when binding new task rules in working memory. Given the ubiquity of instruction based learning, these deficits are likely to impede daily living. They will also confound clinical assessment of other psychological processes. Future work should determine the value of instruction based learning as a sensitive early marker of cognitive decline and as a measure of responsiveness to therapy in Parkinson disease.