Despite several major advances in breast cancer diagnosis and treatment, the American Cancer Society has estimated that in the US alone 43300 women and 400 men will die from breast cancer in 2007. Breast cancer typically is a multi-focal, multi-faceted disease, with the major cause of mortality being complications due to metastasis. Whereas a decade ago genetic alterations were the primary focus in cancer research, it is now apparent that the physiological tumor microenvironment, interactions between cancer cells and stromal cells such as endothelial cells, fibroblasts and macrophages, the extracellular matrix, and a multitude of secreted factors and cytokines influence progression, aggressiveness, and response of the disease to treatment. Prevention, early diagnosis, and treatment are the three broad challenges for MR molecular and functional imaging in reducing mortality from this disease. Multi-parametric molecular and functional MRI provides unprecedented opportunities for identifying novel targets for imaging and therapy at the bench, as well as for accurate diagnosis and monitoring response to therapy at the bedside. Here we provide an overview of the current status of molecular and functional MRI of breast cancer, outlining some key developments, as well as identifying some of the important challenges facing this field in the future.