Current multiple sclerosis (MS) is generally thought to consist of two general pathological processes; acute inflammation and degeneration. The relationship between these two components is not understood. What is clear, however, is that the measures of acute inflammation are a poor predictor of long-term disability. Although some have suggested that inflammation may not contribute directly to the essential pathology in MS or that it is secondary to tissue degeneration, most students of the disease believe that the two processes are linked. Therefore, applications of MRI to measure both components of the disease are important. As most readers know, considerable success has been achieved in measuring acute inflammation and very little success has been obtained in identifying measures that correlate with disability and the prediction of future disability has not been achieved. In this review, we will examine the successes and failures of MRI in measuring these two components of the disease process. Consequently, we will not attempt to provide a detailed review of each MRI technique or sequence that has been applied to MS (a number of excellent reviews are available) but rather discuss how these techniques have been applied to answer specific questions. We will provide some comments on the use of MRI in clinical trials as well as in clinical practice. Finally, we will end with a brief discussion of future challenges.