Dynamic contrast agent-enhanced perfusion magnetic resonance (MR) imaging provides physiologic information that complements the anatomic information available with conventional MR imaging. Analysis of dynamic data from perfusion MR imaging, based on tracer kinetic theory, yields quantitative estimates of cerebral blood volume that reflect the underlying microvasculature and angiogenesis. Perfusion MR imaging is a fast and robust imaging technique that is increasingly used as a research tool to help evaluate and understand intracranial disease processes and as a clinical tool to help diagnose, manage, and understand intracranial mass lesions. With the increasing number of applications of perfusion MR imaging, it is important to understand the principles underlying the technique. In this review, the essential underlying physics and methods of dynamic contrast-enhanced susceptibility-weighted echo-planar perfusion MR imaging are described. The clinical applications of cerebral blood volume maps obtained with perfusion MR imaging in the differential diagnosis of intracranial mass lesions, as well as the pitfalls and limitations of the technique, are discussed. Emphasis is on the clinical role of perfusion MR imaging in providing insight into the underlying pathophysiology of cerebral microcirculation.