Diffusion-weighted MRI (DWI) is a sensitive and reliable marker of cerebral ischemia. Within minutes of an ischemic event in the brain, the microscopic motion of water molecules measured with DWI, termed the apparent diffusion coefficient (ADC), decreases within the infarcted region. However, although the change is related to cell swelling, the precise pathological mechanism remains elusive. We show that focal enlargement and constriction, or beading, in axons and dendrites are sufficient to substantially decrease ADC. We first derived a biophysical model of neurite beading, and we show that the beaded morphology allows a larger volume to be encompassed within an equivalent surface area and is, therefore, a consequence of osmotic imbalance after ischemia. The DWI experiment simulated within the model revealed that intracellular ADC decreased by 79% in beaded neurites compared with the unbeaded form. To validate the model experimentally, excised rat sciatic nerves were subjected to stretching, which induced beading but did not cause a bulk shift of water into the axon (i.e., swelling). Beading-induced changes in cell-membrane morphology were sufficient to significantly hinder water mobility and thereby decrease ADC, and the experimental measurements were in excellent agreement with the simulated values. This is a demonstration that neurite beading accurately captures the diffusion changes measured in vivo. The results significantly advance the specificity of DWI in ischemia and other acute neurological injuries and will greatly aid the development of treatment strategies to monitor and repair damaged brain in both clinical and experimental settings.