Phase-contrast magnetic resonance imaging (PC-MRI) or flow-sensitive MRI can be used to noninvasively measure intracranial vascular and CSF flow. Monro-Kellie homeostasis is the complex compensatory mechanism for the increase in intracranial blood volume during systole. Through PC-MRI techniques, our understanding of Monro-Kellie homeostasis and the associated intracranial hydrodynamics has greatly improved. Failure of this homeostatic mechanism has been implicated in a wide range of cerebral disorders, including vascular and Alzheimer's dementia, late-onset depression, benign and secondary intracranial hypertension, communicating and normal pressure hydrocephalus, and age-related white matter changes. The most common mode of homeostatic failure is due to vascular disease with decreased cerebral arterial compliance. This has wide-reaching implications in the investigation of patients with cerebral vascular disease. Here we discuss the role of PC-MRI in the study of cerebral hydrodynamics and the current understanding of Monro-Kellie homeostasis in both healthy and disease states. Quantitative assessment of the changes in this homeostatic mechanism using PC-MRI has important implications in the development of biomarkers of vascular involvement in disease with application in diagnosis, treatment planning, phenotype identification, and outcome assessment in clinical trials.