Breast MRI is an area of intense research and is fast becoming an important tool for the diagnosis of breast cancer. This review covers recent advances in breast MRI, MRS, and image post-processing and analysis. Several studies have explored a multi-parametric approach to breast imaging that combines analysis of traditional contrast enhancement patterns and lesion architecture with novel methods such as diffusion, perfusion, and spectroscopy to increase the specificity of breast MRI studies. Diffusion-weighted MRI shows some potential for increasing the specificity of breast lesion diagnosis and is even more promise for monitoring early response to therapy. MRS also has great potential for increasing specificity and for therapeutic monitoring. A limited number of studies have evaluated perfusion imaging based on first-pass contrast bolus tracking, and these clearly identify that vascular indices have great potential to increase specificity. The review also covers the relatively new acquisition technique of MR elastography for breast lesion characterization. A brief survey of image processing algorithms tailored for breast MR, including registration of serial dynamic images, segmentation and extraction of morphological features of breast lesions, and contrast uptake modeling, is also included. Recent advances in MRI, MRS, and automated image analysis have increased the utility of breast MR in diagnosis, screening, management, and therapy monitoring of breast cancer. Copyright © 2008 John Wiley & Sons, Ltd.