In this study, we have performed simulations to address the effects of diffusion encoding parameters, signal-to-noise ratio (SNR) and T2 on skeletal muscle diffusion tensor indices and fiber tracts. Where appropriate, simulations were corroborated and validated by in vivo diffusion tensor imaging (DTI) of human skeletal muscle. Specifically, we have addressed: (i) the accuracy and precision of the diffusion parameters and eigenvectors at different SNR levels; (ii) the effects of the diffusion gradient direction encoding scheme; (iii) the optimal b value for diffusion tensor estimation; (iv) the effects of changes in skeletal muscle T2; and, finally, the influence of SNR on fiber tractography and derived (v) fiber lengths, (vi) pennation angles and (vii) fiber curvatures. We conclude that accurate DTI of skeletal muscle requires an SNR of at least 25, a b value of between 400 and 500 s/mm2, and data acquired with at least 12 diffusion gradient directions homogeneously distributed on half a sphere. Furthermore, for DTI studies focusing on skeletal muscle injury or pathology, apparent changes in the diffusion parameters need to be interpreted with great care in view of the confounding effects of T2, particularly for moderate to low SNR values. Copyright © 2013 John Wiley & Sons, Ltd.