Objective To compare the value of diffusion-weighted MRI (DWI) with the venous "washout" appearance during dynamic MRI for the assessment of small arterial hypervascular lesions in cirrhotic liver. Methods After exclusion of benign hypervascular lesions, including haemangiomas and subcapsular non-tumorous arterioportal shunts, indicated by typical imaging features, a total of 109 small arterial hypervascular lesions (0.5-3.0 cm in the longest diameter) in 65 patients with cirrhosis who underwent gadopentetate dimeglumine-enhanced dynamic MRI and DWI (b=50, 400, 800 s mm(-2)) at 1.5 T during a 16-month period were retrospectively analysed to determine the presence of venous washout during dynamic imaging or sustained hyperintensity upon increasing the b factor size on DWI. Results Among the 99 hypervascular hepatocellular carcinomas (HCCs), sustained hyperintensity on DWI (92/99, 93%) was more prevalent than the washout appearance (72/99, 72%) on dynamic MRI (p<0.001). Depending on the lesion size, subcentimetre-sized HCCs had a significantly lower prevalence of venous washout (13/30, 43%) than the sustained hyperintensity on DWI (27/30, 90%) (p=0.001). In all 10 hypervascular benign conditions, there was no venous washout on dynamic MRI and no sustained hyperintensity on DWI. Sensitivity and specificity for diagnosis of hypervascular HCCs were 92.9% and 100% in DWI and 72% and 100% in dynamic MRI, respectively. Conclusion Compared with the venous washout during dynamic imaging, DWI provides more reliable information in the MRI assessment of small hypervascular HCCs, distinguishing them from atypical hypervascular benign or pseudolesions. DWI could complement the early diagnosis of small hypervascular HCCs that do not display venous washout during dynamic imaging.