Oxygen challenge imaging involves transient hyperoxia applied during deoxyhaemoglobin sensitive (T2*-weighted) magnetic resonance imaging and has the potential to detect changes in brain oxygen extraction. In order to develop optimal practical protocols for oxygen challenge imaging, we investigated the influence of oxygen concentration, cerebral blood flow change, pattern of oxygen administration and field strength on T2*-weighted signal. Eight healthy volunteers underwent multi-parametric magnetic resonance imaging including oxygen challenge imaging and arterial spin labelling using two oxygen concentrations (target FiO2 of 100 and 60%) administered consecutively (two-stage challenge) at both 1.5T and 3T. There was a greater signal increase in grey matter compared to white matter during oxygen challenge (p < 0.002 at 3T, P < 0.0001 at 1.5T) and at FiO2 = 100% compared to FiO2 = 60% in grey matter at both field strengths (p < 0.02) and in white matter at 3T only (p = 0.0314). Differences in the magnitude of signal change between 1.5T and 3T did not reach statistical significance. Reduction of T2*-weighted signal to below baseline, after hyperoxia withdrawal, confounded interpretation of two-stage oxygen challenge imaging. Reductions in cerebral blood flow did not obscure the T2*-weighted signal increases. In conclusion, the optimal protocol for further study should utilise target FiO2 = 100% during a single oxygen challenge. Imaging at both 1.5T and 3T is clinically feasible.