MRI's T2 relaxation time is a valuable biomarker for neuromuscular disorders and muscle dystrophies. One of the hallmarks of these pathologies is the infiltration of adipose tissue and a loss of muscle volume. This leads to a mixture of two signal components, from fat and from water, to appear in each imaged voxel, each having a specific T2 relaxation time. In this proof‐of‐concept work, we present a technique that can separate the signals from water and from fat within each voxel, measure their separate T2 values, and calculate their relative fractions. The echo modulation curve (EMC) algorithm is a dictionary‐based technique that offers accurate and reproducible mapping of T2 relaxation times. We present an extension of the EMC algorithm for estimating subvoxel fat and water fractions, alongside the T2 and proton‐density values of each component. To facilitate data processing, calf and thigh anatomy were automatically segmented using a fully convolutional neural network and FSLeyes software. The preprocessing included creating two signal dictionaries, for water and for fat, using Bloch simulations of the prospective protocol. Postprocessing included voxelwise fitting for two components, by matching the experimental decay curve to a linear combination of the two simulated dictionaries. Subvoxel fat and water fractions and relaxation times were generated and used to calculate a new quantitative biomarker, termed viable muscle index, and reflecting disease severity. This biomarker indicates the fraction of remaining muscle out of the entire muscle region. The results were compared with those using the conventional Dixon technique, showing high agreement (R = 0.98, p < 0.001). It was concluded that the new extension of the EMC algorithm can be used to quantify abnormal fat infiltration as well as identify early inflammatory processes corresponding to elevation in the T2 value of the water (muscle) component. This new ability may improve the diagnostic accuracy of neuromuscular diseases, help stratification of patients according to disease severity, and offer an efficient tool for tracking disease progression.