The assessment of cerebral functions has long been the domain of positron-emission tomography and single photon emission computed tomography. The use of rapid imaging sequences and contrast agents enables physiological and pathophysiological cerebral processes to be assessed and monitored by magnetic resonance imaging. Both T1- and T2-weighted contrast-enhanced fast imaging sequences can be used to assess tissue perfusion, vascularity, and microcirculation by applying models developed in nuclear medicine. The diffusion of water molecules and hemodynamic aspects of the macrovasculature can also be monitored. Functional magnetic resonance (MR) imaging enables the visualization of neuronal function and activity, and MR spectroscopy makes possible the metabolic mapping of lesions and surrounding tissue. The advantages of MR techniques includes their low invasiveness, multiplanar imaging ability, and lack of radiation. This contribution discusses the clinical use of functional MR imaging methods and their role in neuroradiological diseases. Measuring perfusion and diffusion allows detailed insight into the pathophysiology of cerebral ischemia and is already being used routinely in acute ischemic stroke. Dynamic MR angiography enables the hemodynamic assessment of vascular malformations. In CNS neoplasms these imaging techniques can improve lesion characterization and the selecting, planning, and monitoring of therapy. Functional MR imaging techniques have also revolutionized the study of psychiatric illness; however, their clinical utility here is still limited. Initial results in patients with dementia and schizophrenia have provided insight into the pathophysiological changes of these diseases.