Background The diagnosis of prostate cancer has long been plagued by the absence of an imaging tool that reliably detects and localises significant tumours. Recent evidence suggests that multi‐parametric MRI could improve the accuracy of diagnostic assessment in prostate cancer. This review serves as a background to a recent USANZ position statement. It aims to provide an overview of MRI techniques and to critically review the published literature on the clinical application of MRI in prostate cancer. Technical Aspects The combination of anatomical (T2‐weighted) MRI with at least two of the three functional MRI parameters – which include diffusion‐weighted imaging, dynamic contrast‐enhanced imaging and spectroscopy – will detect greater than 90% of significant (moderate to high risk) tumours; however MRI is less reliable at detecting tumours that are small (<0.5 cc), low grade (Gleason score 6) or in the transitional zone. The higher anatomical resolution provided by 3‐Tesla magnets and endorectal coils may improve the accuracy, particularly in primary tumour staging. Screening The use of mpMRI to determine which men with an elevated PSA should undergo biopsy is currently the subject of two large clinical trials in Australia. MRI should be used with caution in this setting and then only in centres with established uro‐radiological expertise and quality control mechanisms in place. There is sufficient evidence to justify using MRI to determine the need for repeat biopsy and to guide areas in which to focus repeat biopsy. Image‐Directed Biopsy MRI‐directed biopsy is an exciting concept supported by promising early results, but none of the three proposed techniques have so far been proven superior to standard biopsy protocols. Further evidence of superior accuracy and core‐efficiency over standard biopsy is required, before their costs and complexities in use can be justified. Treatment Selection and Planning When used for primary‐tumour staging (T‐staging), MRI has limited sensitivity for T3 disease, but its specificity of greater than 95% may be useful in men with intermediate‐high risk disease to identify those with advanced T3 disease not suitable for nerve sparing or for surgery at all. MRI appears to be of value in planning dosimetry in men undergoing radiotherapy, and in guiding selection for and monitoring on active surveillance.