A few studies have reported that magnetization transfer (MT) -preparation interacts with blood oxygen level dependent (BOLD) contrast used for functional magnetic resonance imaging (MRI). However, the mechanism is still not well established. This study shows that blood oxygenation level itself affects MT contrast. MT ratio (MTR) decreases with increased blood oxygenation, which is demonstrated by ex vivo and in vivo experiments. Oxygenated blood shows less MTR contrast compared to deoxygenated blood sample; and higher levels of oxygen inhalation decrease tissue MTR in vivo especially in brain tumor region. The percentage reduction of MTR due to hyperoxia inhalation, referred to as the blood oxygen dependent magnetization transfer (BOLDMT) effect, correlates well with tissue oxygen extraction, which is highest in well-vascularized tumor rim, followed by inner tumor, gray matter (GM), and white matter (WM) normal tissue. Simulations and experiments demonstrate that BOLDMT effect induced with hyperoxia inhalation may be generated by decreased tissue T (1) due to increased O(2) dissolution and increased tissue T (2) due to reduced deoxyhemoglobin (dHb) concentration. Compared to regular T (2)* weighted BOLD contrast, BOLDMT has higher insensitivity to B (0) inhomogeneities. BOLDMT may potentially serve as a reliable and novel biomarker for tumor oxygen extraction.