The concept of magnetic susceptibility is central to many current research and development activities in magnetic resonance imaging (MRI); for example, the development of MR-guided surgery has created a need for surgical instruments and other devices with susceptibility tailored to the MR environment; susceptibility effects can lead to position errors of up to several millimeters in MR-guided stereotactic surgery; and the variation of magnetic susceptibility on a microscopic scale within tissues contributes to MR contrast and is the basis of functional MRI. The magnetic aspects of MR compatibility are discussed in terms of two levels of acceptability: Materials with the first kind of magnetic field compatibility are such that magnetic forces and torques do not interfere significantly when the materials are used within the magnetic field of the scanner; materials with the second kind of magnetic field compatibility meet the more demanding requirement that they produce only negligible artifacts within the MR image and their effect on the positional accuracy of features within the image is negligible or can readily be corrected. Several materials exhibiting magnetic field compatibility of the second kind have been studied and a group of materials that produce essentially no image distortion, even when located directly within the imaging field of view, is identified. Because of demagnetizing effects, the shape and orientation, as well as the susceptibility, of objects within and adjacent to the imaging region is important in MRI. The quantitative use of susceptibility data is important to MRI, but the use of literature values for the susceptibility of materials is often difficult because of inconsistent traditions in the definitions and units used for magnetic parameters-particularly susceptibility. The uniform use of SI units for magnetic susceptibility and related quantities would help to achieve consistency and avoid confusion in MRI.