Subtle changes in a subject's breathing rate or depth, which occur naturally during rest at low frequencies (<0.1 Hz), have been shown to be significantly correlated with fMRI signal changes throughout gray matter and near large vessels. The goal of this study was to investigate the impact of these low-frequency respiration variations on both task activation fMRI studies and resting-state functional connectivity analysis. Unlike MR signal changes correlated with the breathing motion ( approximately 0.3 Hz), BOLD signal changes correlated with across-breath variations in respiratory volume ( approximately 0.03 Hz) appear localized to blood vessels and regions with high blood volume, such as gray matter, similar to changes seen in response to a breath-hold challenge. In addition, the respiration-variation-induced signal changes were found to coincide with many of the areas identified as part of the 'default mode' network, a set of brain regions hypothesized to be more active at rest. Regions could therefore be classified as being part of a resting network based on their similar respiration-induced changes rather than their synchronized neuronal activity. Monitoring and removing these respiration variations led to a significant improvement in the identification of task-related activation and deactivation and only slight differences in regions correlated with the posterior cingulate at rest. Regressing out global signal changes or cueing the subject to breathe at a constant rate and depth resulted in an improved spatial overlap between deactivations and resting-state correlations among areas that showed deactivation.