Major technologic advances in magnetic resonance (MR) imaging, including the advent of novel pulse sequences (eg, diffusion-weighted and steady-state free precession sequences) and the use of hepatocyte-specific contrast agents, have led to better image quality and shorter acquisition times, resulting in dramatic improvements in the noninvasive detection and characterization of hepatic lesions, particularly hypervascular neoplasms. However, as the role of MR imaging in clinical evaluation of the liver continues to evolve, keeping abreast of new developments can be daunting as well as confusing. A systematic approach that makes use of a simple decision algorithm can help differentiate hypervascular hepatic lesions on the basis of their distinguishing MR imaging characteristics and related clinical information.