Magnetic resonance imaging (MRI) is an invaluable tool used in the diagnosis of ischemic stroke. Ongoing technological advances in MRI technology and advent of new imaging sequences has now made it possible to use MRI as a prognostic tool both in the acute and chronic stages of cerebral ischemia. This review summarizes the role of MRI in estimating final tissue outcome, specifically by providing information on severity and location of ischemic insult, cerebral blood flow dynamics, vascular status, and cerebral reserve. All of these predictions can then be used to make projections regarding clinical outcome, and can be refined by other prognostic models to estimate recovery and risk of further ischemic events. These algorithms, in the end, can ultimately help the clinician in tailoring therapies on an individual basis and optimize the risk–benefit ratio of therapeutic approaches used in the acute and chronic stages of ischemic stroke. The implementation of such prognostic algorithms to clinical imaging workstations and calculation of all the possible projections within minutes after completion of imaging are likely to become an integral part of clinical practice in the near future.