To evaluate the reliability of MR imaging in tissue characterization and depiction of tumor boundaries, we performed MR-pathologic correlation using parosteally implanted VX-2 carcinoma in 17 rabbit thighs. T1-weighted, T2-weighted and Gd-DTPA enhanced T1-weighted axial images were obtained 10-30 days after tumor implantation. After the animals were killed, frozen and sectioned along the MR imaging planes, and histopathologic examinaton were done, For accurate MR-pathologic correlation, rabbits were fixed on the cardboard plate to minimize position change during the procedures. Tumor boundaries depicted on MR images were larger than those depicted on the specimen. Small tumors were surrounded by capsule-like loose connective tissue. Loose connective tissue became compact with tumor growth. This connective tissue showed high signal intensity on both T2-weighted and Gd-DTPA enhanced T1-weighted images. Muscle atrophy with fatty tissue accumulation around the tumor also contributed to the high signal intensity on MR images. Peritumoral edema and inflammatory reaction were not remarkable. Six of 8 cases with bone marrow fibrosis were detected on MR images. We concluded that peritumoral loose connective tissue and muscle atrophy exaggerated the size of experimentally induced malignant musculoskeletal tumors on MR images.