Purpose: To prospectively assess functional magnetic resonance (MR) imaging during hypercapnia and hyperoxia for monitoring changes in liver perfusion and hemodynamics in rats. Materials and Methods: All experiments were performed with approval of an animal care and use committee. Functional T2*-weighted gradient-echo MR images of the rat liver were acquired during hyperoxia and graded hypercapnia (n = 24). Additional images were acquired during portal vein ligation (n = 4), induced hypovolemia (n = 5), and 70% hepatectomy (n = 5). Hypercapnic effects were confirmed with Doppler ultrasonography and with gadopentetate dimeglumine. Differences between groups were analyzed by using Wilcoxon rank sum test, except for the graded hypercapnia, for which one-way analysis of variance was used. Results: Liver signal intensity (SI) increased due to hyperoxia; the percentage change in SI was seven times greater than that in muscle tissue; this reflects higher vascularity of the liver. Liver SI decreased due to hypercapnia; the percentage change in SI was negative in the liver but positive in the muscle (P < .001). Induced hypovolemia resulted in considerable decreases in functional MR imaging response; this reflects lower liver perfusion. Clinical applicability of the functional MR imaging method was proved by monitoring changes in liver perfusion that resulted from liver resection. Conclusion: In the liver, the magnitude of the percentage change in SI induced by hypercapnia and hyperoxia reflects changes in total blood volume; whereas percentage change in SI values induced by hypercapnia from a negative to a positive value reflects relative changes in portal-to-arterial blood flow ratio.