Background Chemical shift encoded magnetic resonance imaging (CSE‐MRI)‐based tissue fat quantification is confounded by increased R2* signal decay rate caused by the presence of excess iron deposition. Purpose To determine the upper limit of R2* above which it is no longer feasible to quantify proton density fat fraction (PDFF) reliably, using CSE‐MRI. Study Type Prospective. Population Cramér–Rao lower bound (CRLB) calculations, Monte Carlo simulations, phantom experiments, and a prospective study in 26 patients with known or suspected liver iron overload. Field Strength/Sequence Multiecho gradient echo at 1.5 T and 3.0 T. Assessment CRLB calculations were used to develop an empirical relationship between the maximum R2* value above which PDFF estimation will achieve a desired number of effective signal averages. A single voxel multi‐TR, multi‐TE stimulated echo acquisition mode magnetic resonance spectroscopy acquisition was used as a reference standard to estimate PDFF. Reconstructed PDFF and R2* maps were analyzed by one analyst using multiple regions of interest drawn in all nine Couinaud segments. Statistical Tests None. Results Simulations, phantom experiments, and in vivo measurements demonstrated unreliable PDFF estimates with increased R2*, with PDFF errors as large as 20% at an R2* of 1000 s −1 . For typical optimized Cartesian acquisitions (TE1 = 0.75 msec, ΔTE = 0.67 msec at 1.5 T, TE1 = 0.65 msec, ΔTE = 0.58 msec at 3.0 T), an empirical relationship between PDFF estimation errors and acquisition parameters was developed that suggests PDFF estimates are unreliable above an R2* of ~538 s −1 and ~779 s −1 at 1.5 T and 3 T, respectively. This empirical relationship was further investigated with phantom experiments and in vivo measurements, with PDFF errors at an R2* of 1000 s −1 at 3.0 T as large as 10% with TE1 = 1.24 msec, ΔTE = 1.01 msec compared to 3% with TE1 = 0.65 msec, ΔTE = 0.58 msec. Data Conclusion We successfully developed a theoretically‐based empirical formula that may provide an easily calculable guideline to identify R2* values above which PDFF is not reliable in research and clinical applications using CSE‐MRI to quantify PDFF in the presence of iron overload. Level of Evidence 1 Technical Efficacy Stage 1