A water and fat separation technique based on a three-point Dixon method using two-dimensional (2D) and three-dimensional (3D) gradient-echo sequences and a new phase-unwrapping approach is presented. Using velocity-compensated sequences, three images, with water and fat protons in phase, opposed phase, and in phase, were acquired in an interleaved fashion for each phase-encoding line of the image. A fast 2D scan permitted acquisition of images within a single breath-hold, eliminating respiratory motion artifacts. The 3D sequence allowed coverage of a large region of interest with thin, contiguous slices. To correct field inhomogeneity effects, phase unwrapping was required. This was accomplished by comparing the corresponding pixels in the two water and fat in-phase images on a pixel-by-pixel basis. This phase-unwrapping approach is faster, more reliable, and requires less user interfacing than other methods. The water and fat separation method performed well in various parts of the body.