Purpose To determine whether parameters obtained from intravoxel incoherent motion (IVIM)‐diffusion‐weighted imaging (DWI) using multiple b‐values can improve characterization of common focal liver lesions (FLLs), compared with the apparent diffusion coefficient (ADCtotal). Materials and Methods Our Institutional Review Board approved this retrospective study and informed consent was waived. In all, 142 patients with 169 FLLs underwent liver magnetic resonance imaging (MRI) including IVIM‐DWI with multiple b factors at 3.0T. ADCtotal and IVIM‐DWI‐derived parameters including true diffusion (Dt), pseudodiffusion (Dp), and perfusion fraction (f) were calculated for each lesion and compared using dedicated software. Results Dt and ADCtotal were significantly lower in malignancies (0.95 ± 0.21, 1.14 ± 0.24, (×10−3 mm2/sec)) than in benign FLLs (1.61 ± 0.34, 1.72 ± 0.37, (×10−3 mm2/sec)). In the differential diagnosis of malignancies from benign lesions, Dt (Az value: 0.971) showed better diagnostic performance than ADCtotal (Az: 0.933) (P < 0.0005). Dt (Az: 0.961) also showed better diagnostic performance than ADCtotal (Az: 0.919) in differentiating hypervascular malignancies from benign hypervascular FLLs (P < 0.0005). In addition, Dp and f were significantly higher in hypervascular FLLs (35.74 ± 20.08 (×10−3 mm2/sec), 28.14 ± 11.82 (%)) than hypovascular FLLs (21.87 ± 13.8 (×10−3 mm2/sec), 12.2 ± 5.92 (%)) (P < 0.0001). Conclusion Dt provided better diagnostic performance than ADCtotal in differentiating benign from malignant lesions. Dp and f were significant parameters for diagnosing hypervascular FLLs. J. Magn. Reson. Imaging 2014;39:276–285. © 2013 Wiley Periodicals, Inc.