Pseudoprogression may present as transient new or increasing enhancing lesions that mimic recurrent tumors in treated glioblastoma. The purpose of this study was to examine the utility of dynamic contrast enhanced T1 magnetic resonance imaging (DCE MRI) in differentiating between pseudoprogression and tumor progression and devise a cut-off value sensitive for pseudoprogression. We retrospectively examined 37 patients with glioblastoma treated with radiation and temozolomide after surgical resection that then developed new or increasing enhancing lesion(s) indeterminate for pseudoprogression versus progression. Volumetric plasma volume (Vp) and time-dependent leakage constant (Ktrans) maps were measured for the enhancing lesion and the mean and ninetieth percentile histogram values recorded. Lesion outcome was determined by clinical follow up with pseudoprogression defined as stable disease not requiring new treatment. Statistical analysis was performed with Wilcoxon rank-sum tests. Patients with pseudoprogression (n = 13) had Vp (mean) = 2.4 and Vp (90 %tile) = 3.2; and Ktrans (mean) = 3.5 and Ktrans (90 %tile) = 4.2. Patients with tumor progression (n = 24) had Vp (mean) = 5.3 and Vp (90 %tile) = 6.6; and Ktrans (mean) = 7.4 and Ktrans (90 %tile) = 9.1. Compared with tumor progression, pseudoprogression demonstrated lower Vp perfusion values (p = 0.0002) with a Vp (mean) cutoff <3.7 yielding 85% sensitivity and 79% specificity for pseudoprogression. Ktrans (mean) of >3.6 had a 69% sensitivity and 79% specificity for disease progression. DCE MRI shows lower plasma volume and time dependent leakage constant values in pseudoprogression than in tumor progression. A cut-off value with high sensitivity for pseudoprogression can be applied to aid in interpretation of DCE MRI.