AbstractA central issue in magnetic resonance imaging of human brain function using blood oxygenation level‐dependent (BOLD) contrast is the accurate interpretation of the signal changes that are observed. Using a method that incorporates repeated phase rotation and convolution with a smoothing function to simulate spin diffusion in the presence of magnetic field perturbers, the dependencies of the absolute and relative changes in transverse relaxation rates (δR2* and δR2) on biophysical and physiologic parameters were explored. First we introduce the modeling methodology. Then we simulate δR2* and δR2as physiologic and biophysical parameters are modulated within the ranges that they vary across subjects and voxels in the brain. The simulations demonstrate that the δR2* and δR2values that occur with activation‐induced changes in blood oxygenation depend most strongly on the resting state blood volume and field strength. The δR2*/δR2ratios depend most strongly on the vessel radius and spin diffusion