Susceptibility agents such as dysprosium may reduce the apparent T2 of a tissue by inducing magnetic field gradients so that diffusion of water molecules causes dephasing of the transverse magnetization. Gadolinium has a susceptibility that is about 30% lower than dysprosium, so that diffusion losses are expected to be only half as big, but it also may produce paramagnetic relaxation by dipolar interactions. The relative importance of these two processes is dependent on several parameters, including the metal concentration, pulse sequence timing, field strength, and the permeability of tissue interfaces to water exchange. The conditions under which exchange-mediated dipolar interactions are less important than diffusion losses have been derived for capillary borne contrast agents in realistic situations.