We propose a new approach using wavelet encoding to improve temporal resolution in contrast-enhanced magnetic resonance (MR) imaging. Exploiting the unique property of wavelets localized in space and frequency, we construct an efficient encoding scheme to capture signal changes due to contrast agent uptake, which in general is spatially localized with low- and mid-range frequency components. On the basis of space-frequency analysis, we describe mathematical formulations of our method and discuss its theoretical advantages over Fourier-based phase-encoding methods (the keyhole and reduced-encoding imaging by generalized-series reconstruction [RIGR] techniques). The results obtained in computer simulations and a phantom study demonstrate the feasibility and practical advantages of our approach.