Cirrhosis is the main risk factor for the development of hepatocellular carcinoma (HCC). The major causative factors of cirrhosis in the United States and Europe are chronic hepatitis C infection and excessive alcohol consumption with nonalcoholic steatohepatitis emerging as another important risk factor. Magnetic resonance imaging is the most sensitive imaging technique for the diagnosis of HCC, and the sensitivity can be further improved with the use of diffusion-weighted imaging and hepatocyte-specific contrast agents. The combination of arterial phase hyperenhancement, venous or delayed phase hypointensity "washout feature," and capsular enhancement are features highly specific for HCC with reported specificities of 96% and higher. When these features are present in a mass in the cirrhotic liver, confirmatory biopsy to establish the diagnosis of HCC is not necessary. Other tumors, such as cholangiocarcinoma, sometimes occur in the cirrhotic at a much lower rate than HCC and can mimic HCC, as do other benign lesions such as perfusion abnormalities. In this article, we discuss the imaging features of cirrhosis and HCC, the role of magnetic resonance imaging in the diagnosis of HCC and other benign and malignant lesions that occur in the cirrhotic liver, and the issue of nonspecific arterially hyperenhancing nodules often seen in cirrhosis.