Quantitative evaluation of an image processing method to perform as designed is central to both its utility and its ability to guide the data acquisition process. Unfortunately, these tasks can be quite challenging due to the difficulty of experimentally obtaining the “ground truth” data to which the output of a given processing method must be compared. One way to address this issue is via “digital phantoms”, which are numerical models that provide known biophysical properties of a particular object of interest. In this contribution, we propose an in silico validation framework for dynamic contrast-enhanced magnetic resonance imaging (DCE-MRI) acquisition and analysis methods that employs a novel dynamic digital phantom. The phantom provides a spatiotemporally-resolved representation of blood-interstitial flow and contrast agent delivery, where the former is solved by a 1D-3D coupled computational fluid dynamic system, and the latter described by an advection-diffusion equation. Furthermore, we establish a virtual simulator which takes as input the digital phantom, and produces realistic DCE-MRI data with controllable acquisition parameters. We assess the performance of a simulated standard-of-care acquisition (Protocol A) by its ability to generate contrast-enhanced MR images that separate vasculature from surrounding tissue, as measured by the contrast-to-noise ratio (CNR). We find that the CNR significantly decreases as the spatial resolution (SRA, where the subscript indicates Protocol A) or signal-to-noise ratio (SNRA) decreases. Specifically, with an SNRA / SRA = 75 dB / 30 μm, the median CNR is 77.30, whereas an SNRA / SRA = 5 dB / 300 μm reduces the CNR to 6.40. Additionally, we assess the performance of simulated ultra-fast acquisition (Protocol B) by its ability to generate DCE-MR images that capture contrast agent pharmacokinetics, as measured by error in the signal-enhancement ratio (SER) compared to ground truth (PESER). We find that PESER significantly decreases the as temporal resolution (TRB) increases. Similar results are reported for the effects of spatial resolution and signal-to-noise ratio on PESER. For example, with an SNRB / SRB / TRB = 5 dB / 300 μm / 10 s, the median PESER is 21.00%, whereas an SNRB / SRB / TRB = 75 dB / 60 μm / 1 s, yields a median PESER of 0.90%. These results indicate that our in silico framework can generate virtual MR images that capture effects of acquisition parameters on the ability of generated images to capture morphological or pharmacokinetic features. This validation framework is not only useful for investigations of perfusion-based MRI techniques, but also for the systematic evaluation and optimization new MRI acquisition, reconstruction, and image processing techniques.