Functional magnetic resonance imaging (fMRI) has transformed cognitive neuroscience over the past 10-15 years, allowing clinical researchers unprecedented access to the functioning of the human brain under many different conditions including motor, sensory and cognitive stimulation. During the past 5 years, increasing interest has also focused on mapping pharmacologically induced changes in human brain activity produced following exposure to psychoactive agents such as amphetamine and cocaine, and is now frequently termed pharmacological MRI (phMRI). Unfortunately, preclinical fMRI and phMRI studies have not kept pace with human research, largely due to numerous technical hurdles inherent in small laboratory animal imaging, as well as the high cost of necessary equipment. However, this is now set to change with significant investment being made across academic and industry laboratories, as researchers attempt to tap into the huge potential of this noninvasive and powerful translational tool. This review introduces the principles and fundamental assumptions behind the technologies, details some important applications of fMRI and phMRI within a CNS research environment, and examines the potential future impact of the technology.