Pancreatic β‐cell imaging would be useful in monitoring the progression of and therapies for diabetes. The purpose of this study was to develop and evaluate quantitative β‐cell MRI using manganese (Mn2+) labeling of β cells, T1 mapping, and a two‐site water exchange model. Normal, pharmacologically‐treated, and severely diabetic mice underwent injection of MnCl2. Pancreatic water proton T1 relaxation was measured using Look‐Locker MRI, and two‐site water exchange analysis was used to estimate model parameters including the intracellular water proton relaxation rate constant (R1ic) and the intracellular fraction as indicators of β‐cell function and mass, respectively. Logarithmic plots of T1 relaxation revealed two distinct proton pools relaxing with different T1s, and the two‐site water exchange model fit the measured T1 relaxation data better than a monoexponential model. The intracellular R1ic time course revealed the kinetics of β‐cell Mn2+ labeling. Pharmacological treatments with nifedipine, tolbutamide, and diazoxide altered R1ic, indicating that beta cell function was a determinant of Mn2+ uptake. Intracellular fraction was significantly higher in mice with normal β cell mass than in diabetic mice (14.9% vs. 14.4%, P < 0.05). Two‐site water exchange analysis of T1 relaxation of the Mn2+‐enhanced pancreas is a promising method for quantifying β cell volume fraction and function. Magn Reson Med, 2011. © 2011 Wiley‐Liss, Inc.