Objective. To determine whether enchondromas and chondrosarcomas can be differentiated on the basis of peritumoral MR signal abnormality. Design. STIR and T2-weighted MRI images were retrospectively assessed for the presence and extent of abnormal peritumoral marrow and soft-tissue signal. The cause of the peritumoral signal abnormality was determined by histologic correlation with resection specimens. The presence or absence of bone destruction was noted. Patients. Twenty-three patients were studied: ten with enchondromas (three men, seven women; ages 33-73 years) and 13 with chondrosarcomas (seven men, six women; ages 25-88 years). Results. Abnormal peritumoral marrow signal was present on STIR images around none of 10 enchondromas and all of 13 chondrosarcomas (P<0.0001). The marrow signal abnormality corresponded histologically to fine marrow fibrosis in all cases. Adjacent abnormal soft-tissue signal was present on STIR images around none of ten enchondromas and eight (62%) of 13 chondrosarcomas (P=0.0026). Abnormal soft-tissue signal was more common around high-grade than low-grade chondrosarcomas (100% vs 38%, P=0.028), and was more extensive (mean extent 28 mm vs 8 mm; P>0.04). In the subset of tumors without bone destruction, peritumoral marrow signal abnormality was present around none of ten enchondromas and all of five chondrosarcomas (P=0.0003); abnormal soft-tissue signal was present around none of ten enchondromas and two of five chondrosarcomas (P>0.05). Conclusion. Abnormal marrow or soft-tissue signal around a chondroid tumor is suggestive of chondrosarcoma, even in the absence of bone destruction. STIR images are necessary for adequate detection of peritumoral signal abnormalities.