Functional magnetic resonance imaging (MRI) improves tissue characterisation and staging of bone and soft-tissue tumours compared to the information usually supplied by structural imaging. Perfusion MRI, diffusion MRI, and in-phase/opposed-phase MRI can be performed in everyday practice. Nuclear magnetic resonance (NMR) spectroscopic imaging is a challenging technique that is available only in specialised centres. Tumour characterisation can benefit from perfusion MRI with dynamic gadolinium injection and enhancement time-intensity curve analysis or from diffusion MRI. Highly cellular malignant tumours restrict diffusion and consequently decrease the apparent diffusion coefficient (ADC). With some tumours, tissue heterogeneity or the presence of a myxoid component can hinder this evaluation. Chronic hematoma can be distinguished from haemorrhagic sarcoma. Perfusion and diffusion MRI contribute to the evaluation of tumour spread, in particular by differentiating oedema from tumour tissue. Another advantage of perfusion MRI and ADC mapping is the early identification of good responders to chemotherapy. The use of NMR spectroscopy remains limited. Evaluation of the choline peak can help to differentiate benign and malignant tumours. All available functional MRI techniques have limitations and leave some overlap between benign and malignant tumours. Functional MRI can be used only as an adjunctive imaging modality to complement morphological imaging.