Detection and exclusion of focal liver lesions is especially difficult in patients with diffuse liver disease. Magnetic resonance (MR) imaging may be particularly valuable in these patients. By judicious comparison of appropriate pulse sequences, normal and hypertrophic liver may be distinguished from atrophic, neoplastic, or otherwise abnormal hepatic parenchyma. Chemical shift (lipid-sensitive) techniques allow definitive identification of fatty liver, including focal fatty infiltration or focal sparing. T2-weighted and T2*-weighted images allow identification of iron overload, depicting malignancies as focal masses without iron. Analysis of signal intensity and internal morphology allows confident distinction between regenerative nodules and hepatocellular carcinoma in most instances, and allows diagnosis of early carcinoma within regenerative nodules. MR imaging provides capabilities for noninvasive characterization of liver tissue beyond those available with other noninvasive modalities.