The treatment of cutaneous vascular lesions (port wine stains etc.) using lasers has been guided by theories based on the “cold” or room-temperature optical properties of the hemoglobin target chromophore. We have recently presented evidence showing that under the influence of laser irradiation, the optical properties of blood in vitro are time and temperature dependent. Such complications are not currently subsumed into the in vivo theory. Here, we study the time-domain optical properties of blood undergoing photocoagulation in vitro using two newly developed time-resolved techniques. We also study the asymptotic effect of laser photocoagulation on the chemical and structural properties of the components of the blood matrix. We present evidence showing that the photocoagulation process involves significant changes in the optical absorption and scattering properties of blood, coupled with photothermally induced chemical and structural changes. We demonstrate the first use of a laser to deliberately generate magnetic resonance imaging contrast in vitro. We show that this technique offers significant potential advantages to in vivo intravenous chemical contrast agent injection.