The extraction fraction of vascular water in rat brain is investigated by means of diffusion measurements of arterial spin labeled water at varying cerebral blood flow (CBF) values. The apparent diffusion coefficient (ADC) of the difference of the proton magnetization signal in the brain acquired with and without continuous arterial spin labeling is modeled to provide a measure of the amount of arterial water in tissue and vasculature and thus of the extraction fraction. The tissue and vascular portion of the arterial spin labeled water are differentiated based on their diffusion characteristics in a manner analogous to the intravoxel incoherent motion (IVIM) method. The amount of labeled arterial water that exchanges with tissue water is determined by estimating the fraction of the total signal that is associated with the slow-decaying component of a biexponential fit to the normalized difference signal between the magnetization of brain tissue acquired with and without arterial spin labeling. The results indicate that, at normal CBF (1.15 +/- 0.21 ml x g(-1) x min[-1]), about 90% of the arterial spin labeled water diffuses with an ADC of (1.21 +/- 0.37) x 10[-3] mm2 s[-1]), which is equal to tissue. At high CBF, an increasing fraction of the labeling water has a fast-pseudo-diffusion coefficient due to a decrease in water extraction fractions. The results also show that the contribution of vascular water to the measurement of perfusion by techniques that use endogenous water as a tracer can be efficiently eliminated by the use of diffusion sensitizing gradients with small effective b values (b approximately 20 s/mm2), enabling these techniques to monitor true changes in tissue perfusion.