Cerebral blood flow (CBF) is a well-established correlate of brain function and therefore an essential parameter for studying the brain at both normal and diseased states. Arterial spin labeling (ASL) is a noninvasive fMRI technique that uses arterial water as an endogenous tracer to measure CBF. ASL provides reliable absolute quantification of CBF with higher spatial and temporal resolution than other techniques. And yet, the routine application of ASL has been somewhat limited. In this review, we start by highlighting theoretical complexities and technical challenges of ASL fMRI for basic and clinical research. While underscoring the main advantages of ASL versus other techniques such as BOLD, we also expound on inherent challenges and confounds in ASL perfusion imaging. In closing, we expound on several exciting developments in the field that we believe will make ASL reach its full potential in neuroscience research.