The detection after surgery of residual tumor from magnetic resonance (MR) images is difficult due to the low contrast level of the images. Gadolinium-enhanced MR imaging has been found valuable in detecting residual enhancing tumor when performed within 72 hours after surgery. The patient is scanned by the MR scanner with and without infusion of gadolinium, a contrast agent. Usually, the estimation of post-operative tumor volume is done by visual comparison of the T1 MR images obtained with and without gadolinium infusion. The T1 MR images, in most cases, without contrast demonstrates areas of hyper intensities (high brightness levels), consistent with hemorrhage. These hyper intense areas often make it difficult to detect residual tumor in post contrast images. This is due to the presence of both acute hemorrhage and gadolinium enhancement which have high brightness levels in T1 MR images. Even in MR images taken within 72 hours after surgery, detection of tumor enhancement in areas of increased T1 signal produced by blood products or by postoperative changes can be difficult when performed by the naked eye. Due to these problems, the quantification of residual tumor becomes a subjective issue among neuro-radiologists. Thus to reduce errors produced by the human factor, an automated procedure to detect residual tumor is required. We have developed a technique to differentiate tumor enhancement from postoperative changes and blood products on MR imaging. The technique involves fusion of pre- and post-gadolinium MR images performed in the immediate postoperative period. Computerized slice based substraction is then done on the corresponding fused images of the two sets. The subtraction process results in a composite slice, which is examined for differences between pre- and post-gadolinium studies. The presented technique was tested on 14 cases in which MR images were obtained from brain tumor patients within 72 hours after surgery. The subtraction technique easily distinguished residual enhancing tumor from postoperative surgical changes and was simple to perform. The technique proposed and developed has given good results and will be used in clinical trial and diagnosis. Future potentials of the technique are discussed and illustrative cases presented.