This study demonstrates the use of diffusion-weighted MR imaging in improving the specificity of the diagnosis of extraaxial brain tumors. Three surgically proved lesions (one arachnoid cyst and two epidermoid tumors) and two nonsurgically proved lesions (arachnoid and ependymal cysts) were evaluated with T1- and T2-weighted spin-echo studies followed by intravoxel incoherent motion (IVIM) MR imaging. The IVIM images of the lesions were displayed as an apparent diffusion coefficient (ADC) image obtained at 0.65 G/cm (maximum gradient b value = 100 sec/mm2) and compared with external oil and water phantoms. The ADC of arachnoid cysts was similar to stationary water whereas the ADC of epidermoid tumors was similar to brain parenchyma, indicating the solid nature and the slower diffusion rate of the epidermoid tumors. Cisternal CSF demonstrated uniformly high ADC, primarily because of bulk flow, which enhanced image contrast. Improved delineation of postsurgical changes was also possible. Our preliminary results show that diffusion-weighted MR imaging can be useful in distinguishing between arachnoid cysts and epidermoid tumors.