The goal of this study was to determine the degree to which vascular water exchange and blood flowing into an imaging slice affect the accuracy of blood volume measurements of brain and tumor tissue when using intravascular T 1 contrast agents. The study was performed using 2D and 3D gradientecho imaging sequences, since these are two of the most commonly used MRI methods used to evaluate tissue blood volume fraction. Computer simulations were performed and measurements made in a rat 9L gliosarcoma brain tumor model. The computer simulations demonstrate that, with either water exchange or inflow effects alone, the dependence on the physiologic and imaging parameters can be well characterized and therefore potentially offset. In the exchange only case, the parametric dependence of 3D simulations suggest that the best accuracy is achieved with high flip angles, short TR, and low blood contrast agent concentrations. However, for a 2D GRE sequence which is influenced by both water exchange and inflow, the simulations predict that the error trend as a function of the imaging and physiologic parameters is unpredictable and therefore difficult to compensate. With both 2D and 3D GRE the measured blood volume data in rat brain and tumor tissue demonstrate tissue-specific trends, which reflect differences in the considered physiologic parameters. The experimental data strongly support the computer simulations and also indicate that minimization of the physiological effects by proper selection of imaging parameters, contrast concentration, and volume calculation methods is crucial for accurate assessment of absolute blood volume fraction. Magn Reson Med 47: 1110 -1120, 2002.