Magnetic resonance imaging (MRI) has a very high soft tissue contrast resolution and possibilities of tissue characterization unseen by any other imaging modality. Therefore, it has a great potential for evaluation of musculoskeletal tumors, and the experience in this field is steadily increasing. MRI has now proven to be superior for evaluation of the extent of intraosseous tumor growth, for evaluation of intraarticular involvement of tumor, and for delineation among tumor and muscle, fat, necrosis, and bleeding. The method reveals the neurovascular bundles in such detail that angiography in several cases is not longer necessary. However, for evaluation of calcification, periosteal and endosteal reaction, and new bone formation, the method is inferior to the traditional radiologic modalities, including computed tomography (CT). Concerning tissue characterization, it has been shown that different tumor groups differ in their T1 and T2 relaxation times, but much more research in this area is demanded. The combination of spectroscopy and imaging, still in its infancy, may prove important in this aspect.