A fundamental reworking of pharmacokinetic theory for the use of contrast reagents (CRs) in T(1)-weighted MRI studies is presented. Unlike the standard model in common use, this derivation starts with the quantities measured, the intravascular, interstitial, and intracellular (1)H(2)O signals. The time dependences of CR concentrations are introduced as perturbations of the T(1) values of these. Since there is an explicit accounting for the equilibrium exchange of water molecules between tissue compartments, the approach here is a new (second) generation of the shutter-speed model (S(2)M). When the first-order rate constant measuring CR extravasation (K(trans)) is of sufficient magnitude, simulations presented here confirm that neglect of plasma CR, a feature of the first generation of S(2)M, is a valid approximation. The second S(2)M generation (S(2)M2) also automatically accommodates excursions of either or both of the two major equilibrium water exchange systems (transendothelial and transcytolemmal) into any or all possible exchange conditions, from their fast-exchange limits to their slow-exchange limits. This can happen not because the exchange kinetics themselves vary during the isothermal CR passage, but because the MR shutter speeds for these processes can vary. When K(trans) is sufficiently small, the S(2)M2 also naturally accounts for the hyperfine blood agent level dependent (BALD) effect that is easily detectable at high magnetic field. This can be seen for virtually all CRs in normal brain tissue and for virtually all tissues with sufficiently intravascular CRs. Thus, S(2)M2 represents a unified pharmacokinetic theory for intravascular and extracellular T(1) contrast reagents.