Purpose : The purpose of this study is to evaluate the diagnostic capability of MR imaging for distinguishing cholesteatoma from other causes of inflammation. Materials and Methods : We prospectively evaluated the MR images of 17 patients with a fully opacified middle ear in whom CT of the temporal bone suggested cholesteatoma. All patients underwent middle ear surgery and cholesteatoma was verified in 15 cases, granulation tissue in 15, cholesterol granuloma in four and hemotympanium in one. For each lesion, MR and pathologic findings were correlated. Results : All cases of cholesteatoma showed low to intermediate signal intensity on T1-weighted images. On T2-weighted images, 11 cases showed high signal intensity, while seven were less than CSF and four were the same. Four cases revealed central low signal intensity with peripheral rim of high signal intensity. On Gd DTPA-enhanced images, peripheral or marginal enhancement due to surrounding granulation tissue was noted in 12cases. Two appeared to be totally enhanced. One case of congenital cholesteatoma showed no enhancement. On T2-weighted images, all cases of granulation tissue showed high signal intensity, and on neither T1- nor T2-weighted images could these be distinguished from cholesteatoma. On Gd DTPA-enhanced study, all cases of granulation tissue were enhanced, and on T1WI, all cases of cholesterol granuloma showed homogeneous bright signal intensity on T1WI. One case of cholesterol granuloma in the mastoid showed bright signal intensity mixed with irregular areas of dark signal intensity. A further comparison of MR imaging with CT is that two case of labyrinthitis and one of meningitis were diagnosed on Gd-enhanced T1-weighted images. Conclusion : To differentiate cholesteatoma from granulation tissue and cholesterol granuloma by the evaluation of their signal intensities and enhancement patterns, MR imaging is superior to CT. When there are cholesteatoma-associated complications such as labyrinthitis or meningitis, postcontrast MR imaging can provide better information.