To assess the diagnostic accuracy of diffusion tensor imaging (DTI) in the characterization of hepatic focal lesions (HFLs) and compare it to diffusion-weighted imaging (DWI). Prospective analysis was done for 49 patients (23 male and 26 female) with 74 HFLs who underwent dynamic MRI, DWI, and DTI. Apparent diffusion coefficient (ADC) values from DWI, fractional anisotropy (FA) values, and mean diffusivity (MD) values from DTI were measured by two independent radiologists. HFLs were classified into benign and malignant HFLs; the latter were subdivided into HCC and non-HCC lesions. Binary logistic regression was performed to analyze the associations between the DTI parameters and the distinction of malignant lesions. The ADC, MD, and FA at cutoff values of ≤ 1.17 × 10-3 mm2/s, ≤ 1.71 × 10-3 mm2/s, and > 0.29, respectively, are excellent discriminators for differentiating malignant and benign HFLs. The mean ADC and MD values of hemangiomas were significantly higher than HCC and non-HCC malignant lesions. In contrast, the mean FA values of hemangiomas were significantly lower than those of non-HCC malignant lesions and HCCs. The ADC and MD were very good discriminators at cutoff values of > 1.03 × 10-3 mm2/s and > 1.12 × 10-3 mm2/s, respectively. The FA at a cutoff value > 0.38 is an excellent discriminator for HCC versus non-HCC malignant lesions. Only FA value > 0.38 was a statistically significant independent predictor of HCC versus non-HCC lesions among the three parameters. There was an excellent inter-observer agreement with ICC > 0.9. MD and FA of DTI are non-invasive, very good, and excellent discriminators superior to ADC measured by DWI for the differentiation of HFLs. • The ADC, MD, and FA at cutoff values of ≤ 1.17 × 10-3 mm2/s, ≤ 1.71 × 10-3 mm2/s, and > 0.29, respectively, are excellent discriminators for differentiating malignant and benign HFLs. • The mean ADC and MD values of hemangiomas were significantly higher than those of HCC and non-HCC malignant lesions. In contrast, the mean FA values of hemangiomas were significantly lower than those of non-HCC malignant lesions and HCCs, respectively. • Multivariate regression analysis revealed that only FA value > 0.38 was a statistically significant independent predictor of HCC vs. non-HCC lesions. A lesion with FA > 0.38 has 34 times higher odds of being HCC rather than non-HCC lesions.