Purpose This study develops a tracer kinetic model of xenon uptake in the human brain to determine the transfer rate of inhaled hyperpolarized 129Xe from cerebral blood to gray matter that accounts for the effects of cerebral physiology, perfusion and magnetization dynamics. The 129Xe transfer rate is expressed using a tracer transfer coefficient, which estimates the quantity of hyperpolarized 129Xe dissolved in cerebral blood under exchange with depolarized 129Xe dissolved in gray matter under equilibrium of concentration. Theory and Methods Time‐resolved MR spectra of hyperpolarized 129Xe dissolved in the human brain were acquired from three healthy volunteers. Acquired spectra were numerically fitted with five Lorentzian peaks in accordance with known 129Xe brain spectral peaks. The signal dynamics of spectral peaks for gray matter and red blood cells were quantified, and correction for the 129Xe T1 dependence upon blood oxygenation was applied. 129Xe transfer dynamics determined from the ratio of the peaks for gray matter and red blood cells was numerically fitted with the developed tracer kinetic model. Results For all the acquired NMR spectra, the developed tracer kinetic model fitted the data with tracer transfer coefficients between 0.1 and 0.14. Conclusion In this study, a tracer kinetic model was developed and validated that estimates the transfer rate of HP 129Xe from cerebral blood to gray matter in the human brain.