Neural activation leads to increased blood flow and delivery of oxygenated blood. Oxygen is carried by hemoglobin. When hemoglobin does not carry oxygen, electrons of the iron atom are exposed and influence the spins of the hydrogen nuclei in the vicinity leading to their dephasing and the shortening of their relaxation (T2 relaxation during which MRI signal emission occurs). As a result, deoxygenated blood is linked to rapid loss of magnetization and a fainter MRI signal. Conversely, oxygenated hemoglobin arriving at the location of neural activation due to triggered oxygenated blood delivery, will replenish deoxygenated hemoglobin which was negatively influencing spin relaxation in the vicinity. As a result, magnetization will not decay as fast but instead it will have a longer decay, leading to a more sustained and therefore brighter MRI signal. It is noted that the protons in the areas of oxygenated blood give the brightest signal. An image will be created with points of different contrast depending on the blood oxygenation level. Functional MRI is based on what is termed as Blood Oxygenation Level Dependent (BOLD) contrast.
The remarkable phenomenon that makes fMRI possible is the lengthening of the decay of the MRI signal in response to brain activity, i.e. the T2* becomes longer with brain activation. Therefore, regional brain activation can be mapped with T2*-sensitive pulse sequences, such as gradient echo (GRE) sequences with echo times (TE) close to T2* (ref.1).
Figure 1: fMRI image (from Wikipedia)
A historical note of fMRI is provided by Wikipedia. Additionally, an interesting article referring to the introduction of fMRI for detection of brain activity was written by one of the pioneers in the field, K. Kwong who was working at the Massachusetts General Hospital (Kwong K. 2015). The researcher refers to an experiment where he used a pair of flickering goggles for stimulation of the visual cortex (V1 region) of the brain. He run a gradient a T2* weighted gradient echo EPI sequence as well as a T1 weighted inversion recovery spin echo EPI sequence. The visual cortex "lit up" with MR signal at the very first run of the gradient echo experiment.