The importance to MR image quality of the order of acquisition of different phase-encoded views with sequences that have variable TR and TE has been recently reported. It has been shown that the effective point spread function (PSF) may be manipulated by varying TE or TR, or both, with each phase-encoding step. This paper explores the behavior of the PSF in a variable TE sequence and its dependence on both imaging and tissue parameters. It is shown that the PSF is different for each tissue type and that its effect on tissue contrast is a function of both the shape and size of the structure. The important problem of signal loss from small objects that arises when the effective PSF is broad and the difficulty in detecting this phenomenon in practical MR images is illustrated. It is shown that the PSF can produce significant blurring and loss of object contrast in fast spin-echo images but that this blurring may be not be obvious in practice because the noise is unaffected by the PSF. It is also shown that the signal from small lesions with short T2 can easily be lost through this blurring mechanism. The importance of signal loss from small objects and its implication for the clinical use of such sequences as fast spin-echo or rapid acquisition relaxation-enhanced and echo planar imaging is stressed.