Phase images obtained with gradient echo MRI provide image contrast distinct from T1-and T2-weighted images. It is commonly assumed that the local contribution to MRI signal phase directly relates to local bulk tissue magnetic susceptibility. Here, we use Maxwell's equations and Monte Carlo simulations to provide theoretical background to the hypothesis that the local contribution to MRI signal phase does not depend on tissue bulk magnetic susceptibility but tissue magnetic architecture-distribution of magnetic susceptibility inclusions (lipids, proteins, iron, etc.) at the cellular and subcellular levels. Specifically, we show that the regular longitudinal structures forming cylindrical axons (myelin sheaths and neurofilaments) can be locally invisible in phase images. Contrary to an expectation that the phase contrast in multiple sclerosis lesions should always increase in degree along with worsening of lesion severity (which happens for all known MR magnitude-based contrast mechanisms), we show that phase contrast can actually disappear with extreme tissue destruction. We also show that the phase contrast in multiple sclerosis lesions could be altered without loss of nervous system tissue, which happens in mild injury to the myelin sheaths or axonal neurofilaments. Moreover, we predict that the sign of phase contrast in multiple sclerosis lesions indicates the predominant type of tissue injury-myelin damage (positive sign) vs. axonal neurofilament damage (negative sign). Therefore, our theoretical and experimental results shed light on understanding the relationship between gradient echo MRI signal phase and multiple sclerosis pathology.RI has played a revolutionary role in enhancing knowledge in biology and medicine. Numerous MRI techniques have been developed over the years to aid physicians and scientists in understanding tissue structure and function in health and disease. One MRI technique that has been of increasing interest in recent years relies on phase images obtained by gradient echo (GE) MRI. It was shown that phase images provide image contrast distinct from T1-weighted (T1W) and T2-weighted (T2W) images (1-6). However, the sources of phase contrast have not been completely understood and are a subject of intense debate. Myelin was proposed as one of the main contributors to MR signal phase in white matter (7), and it was shown that demyelination leads to a loss of phase contrast between white matter (WM) and gray matter (GM) (8,9). This finding could have been explained by the difference in tissue cellular/ molecular content (iron, lipids, and proteins) between GM and WM. However, it was also reported that phase contrast is practically absent between WM and CSF (cerebrospinal fluid) (3, 6), despite substantial differences in their molecular content. Iron was shown to play an important role in formation of phase contrast in iron-rich areas, such as caudate, putamen, and globus pallidus (10-13). However, experimental data on the role of iron in WM is controversial; although a decrease of the phas...