Perfusion magnetic resonance imaging (MRI) studies quantify the microcirculatory status of liver parenchyma and liver lesions, and can be used for the detection of liver metastases, assessing the effectiveness of anti-angiogenic therapy, evaluating tumor viability after anti-cancer therapy or ablation, and diagnosis of liver cirrhosis and its severity. In this review, we discuss the basic concepts of perfusion MRI using tracer kinetic modeling, the common kinetic models applied for analyses, the MR scanning techniques, methods of data processing, and evidence that supports its use from published clinical and research studies. Technical standardization and further studies will help to establish and validate perfusion MRI as a clinical imaging modality.