Vascular-space-occupancy (VASO) MRI is a novel technique that uses blood signal nulling to detect blood volume alterations through changes in tissue signal. VASO has relatively low signal to noise ratio (SNR) because only 10-20% of tissue signal remain at the time of blood nulling. Here, it is shown that by adding a magnetization transfer (MT) prepulse it is possible to increase SNR either by attenuating the initial tissue magnetization when the MT pulse is placed before inversion, or, accelerating the recovery process when the pulse is applied after the inversion. To test whether the MT pulse would affect the blood nulling time in VASO, MT effects in blood were measured both ex vivo in a bovine blood phantom and in vivo in human brain. Such effects were found to be sufficiently small (<2.5%) under a saturation power <or= 3 microT, length=500 ms, and frequency offset >or=40 ppm to allow use of the same nulling time. Subsequently, functional MRI experiments using MT-VASO were performed in human visual cortex at 3 Tesla. The relative signal changes in MT-VASO were of the same magnitude as in VASO, while the contrast to noise ratio (CNR) was enhanced by 44+/-12% and 36+/-11% respectively. Therefore, MT-VASO should provide a means for increasing inherently low CNR in VASO experiments while preserving the CBV sensitivity.