A mathematical analysis of ghosting artifacts often seen in interleaved echo-planar images (EPI) is presented. These artifacts result from phase and amplitude discontinuities between lines of k-space in the phase-encoding direction, and timing misregistrations from system filter delays. Phase offsets and time delays are often measured using "reference" scans, to reduce ghosting through postprocessing. From the expressions describing ghosting artifacts, criteria were established for reducing ghosting to acceptable levels. Subsequently, the signal-to-noise ratio (SNR) requirements for estimation of time delays and phase offsets, determined from reference scans, was evaluated to establish the effect of estimation error on artifact reduction for interleaved EPI. Artifacts resulting from these effects can be reduced to very low levels when appropriate reference scan estimation is used. This has important implications for functional MRI (fMRI) and applications involving small changes in signal intensity.