The incidence of hepatocellular carcinoma (HCC) has been constantly increasing over the last years mainly due to hepatitis C infection and cirrhosis. The new developments in imaging technology, including magnetic resonance imaging (MRI) and computed tomography (CT), allow a better diagnosis of HCC. Cirrhosis is characterized by formation of nodules from regenerative nodules to dysplastic nodules, followed by HCC. Thus, the differential diagnosis of hypervascular hepatic lesions is important, especially in the nodules smaller than 2 cm, although their characterization may be difficult even when histopathology is used. A multistep approach with the comparison of clinical data, pathological findings and imaging features is useful for a more accurate diagnosis. MRI has the ability to assess the same lesions features as CT and to better characterize the enhancement patterns of nodules combined with the lack of irradiation. Moreover, new liver specific contrast agents and imaging techniques as diffusion-weighted (DWI) sequences are available. Regenerative and low-grade dysplastic nodules demonstrate contrast enhancement similar to that of surrounding liver parenchyma, compare to high-grade dysplastic nodules, which may show arterial enhancement similar to that seen in HCC. We present a review of the MR imaging and histopathological features of hypervascular nodules in the cirrhotic liver, with reference to the transition from dysplasia to HCC.