AbstractThe factors affecting the rate of loss of transverse magnetization in gradient echo and spin‐echo pulse sequences have been quantified using computer modeling for media containing arrays of susceptibility variations. The results are particularly relevant for describing the signal losses that occur in tissues containing capillaries of altered intrinsic susceptibility from the administration of exogenous contrast agents or arising from changes in blood oxygenation. The precise magnitudes and relationship of gradient echo and spin‐echo decay rates depend on geometrical factors such as the sizes and spacings of the inhomogeneities, the rate of water diffusion, field strength, and echo times. The conventional separation of contributions to transverse decay rates arising from so‐called static field effects and diffusion is shown to be inappropriate for many situations of practical interest because diffusion introduces a motional averaging of the static field even in gradient echo sequences. The result of diffusion in some regimes is to reduce the decay rate from field inhomogeneities in gradient echo sequences, so that T2* is longer in media such as tissue where water diffuses reasonably rapidly, than would be the case for stationary nuclei. The effects of different types of contrast agent and the implications for functional imaging based on the effects of deoxyhemoglobin in brain tissue are consi