The process of locating a MR signal by altering the phase of spins in one dimension with a pulsed magnetic field gradient along that dimension prior to the acquisition of the signal.
If a gradient field is briefly switched on and then off again at the beginning of the pulse sequence right after the radio frequency pulse, the magnetization of the external voxels will either precess faster or slower relative to those of the central voxels.
During readout of the signal, the phase of the xy-magnetization vector in different columns will thus systematically differ. When the x- or y- component of the signal is plotted as a function of the phase encoding step number n and thus of time n TR, it varies sinusoidally, fast at the left and right edges and slow at the center of the image. Voxels at the image edges along the phase encoding direction are thus characterized by a higher 'frequency' of rotation of their magnetization vectors than those towards the center.
As each signal component has experienced a different phase encoding gradient pulse, its exact spatial reconstruction can be specifically and precisely located by the Fourier transformation analysis. Spatial resolution is directly related to the number of phase encoding levels (gradients) used. The phase encoding direction can be chosen, e.g. whenever oblique MR images are acquired or when exchanging frequency and phase encoding directions to control wrap around artifacts.