The purpose of this study was to determine the impact of water exchange on tracer kinetic parameter estimates derived from T(1)-weighted dynamic contrast-enhanced (DCE)-MRI data using a direct quantitative comparison with DCE-CT. Data were acquired from 12 patients with bladder cancer who underwent DCE-CT followed by DCE-MRI within a week. A two-compartment tracer kinetic model was fitted to the CT data, and two versions of the same model with modifications to account for the fast exchange and no exchange limits of water exchange were fitted to the MR data. The two-compartment tracer kinetic model provided estimates of the fractional plasma volume (v(p)), the extravascular extracellular space fraction (v(e)), plasma perfusion (F(p)), and the microvascular permeability surface area product. Our findings suggest that DCE-CT is an appropriate reference for DCE-MRI in bladder cancers as the only significant difference found between CT and MR parameter estimates were the no exchange limit estimates of v(p) (P = 0.002). These results suggest that although water exchange between the intracellular and extravascular-extracellular space has a negligible effect on DCE-MRI, vascular-extravascular-extracellular space water exchange may be more important.