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The amplitude of the BOLD response to a stimulus is not only determined by changes in cerebral blood flow (CBF) and oxygen metabolism (CMRO2), but also by baseline physiological parameters such as haematocrit, oxygen extraction fraction (OEF) and blood volume. The calibrated BOLD approach aims to account for this physiological variation by performing an additional calibration scan. This calibration typically consists of a hypercapnia or hyperoxia respiratory challenge, although we propose that a measurement of the reversible transverse relaxation rate, R2′, might also be used. A detailed model of the BOLD effect was used to simulate each of the calibration experiments, as well as the activation experiment, whilst varying a number of physiological parameters associated with the baseline state and response to activation. The effectiveness of the different calibration methods was considered by testing whether the BOLD response to activation scaled by the calibration parameter combined with the measured CBF provides sufficient information to reliably distinguish different levels of CMRO2 response despite underlying physiological variability. In addition the effect of inaccuracies in the underlying assumptions of each technique were tested, e.g. isometabolism during hypercapnia.The three primary findings of the study were: 1) The new calibration method based on R2′ worked reasonably well, although not as well as the ideal hypercapnia method; 2) The hyperoxia calibration method was significantly worse because baseline haematocrit and OEF must be assumed, and these physiological parameters have a significant effect on the measurements; and 3) the venous blood volume change with activation is an important confounding variable for all of the methods, with the hypercapnia method being the most robust when this is uncertain.□ A detailed model of the BOLD signal was used to test different calibration methods. □ A new method using baseline R2′ with no inhaled gases was proposed. □ Each method was tested for its ability to control for physiological variability. □ R2′ performed reasonably well, with hypercapnia better and hyperoxia much worse. □ Accurately accounting for venous blood volume changes is important for all methods.