Standard magnetic resonance imaging (MRI) has been shown to be remarkably insensitive to acute changes following traumatic brain injury. Because diffusion-weighted MRI has recently demonstrated excellent sensitivity to acute ischemic injury and other CNS abnormalities, we evaluated the use of diffusion MRI for the detection of pathologic changes in the rat brain during the first hours following parasagittal fluid percussion brain injury. Diffusion MRI was able to demonstrate a significant diffusion decrease in the primary cortical contusion injury and a comparable decrease in the ipsilateral thalamus. Tissue damage in the thalamus region is much weaker than in the cortex, but the thalamus is a primary site of axonal and dendritic injury in this model. T2 imaging in the same subjects showed slight enhancement in the neighborhood of the injured cortex but was unable to demonstrate injury elsewhere. Diffusion imaging was superior to T2 at demonstrating injury and the prominent diffusion decrease in the thalamus suggests that diffusion MRI is preferentially sensitive to axonal or dendritic injury.