Microstructural variation in magnetic susceptibility can have significant effects on signal magnitude and phase in GE images. The effect of microstructure on R2* and local frequency depends on the susceptibility, volume fraction, shape, orientation and ‘spin density’ of structures. Myelin and non-haeme iron have largest effects in brain tissue. Measured R2*and susceptibility are strongly correlated with macroscopic iron content and show some sensitivity to microstructure. WM tracts appear diamagnetic, with elevated R2* when perpendicular to B0. This behaviour is explained by the anisotropic susceptibility of lipid chains in the myelin which introduces complex dependence of GE signal on WM microstructure.