ABSTRACT: Purpose To determine the effect of radiation dose and iterative reconstruction (IR) on noise, contrast, resolution, and observer-based detectability of subtle hypoattenuating liver lesions and to estimate the dose reduction potential of the IR algorithm in question. Materials and Methods This prospective, single-center, HIPAA-compliant study was approved by the institutional review board. A dual-source computed tomography (CT) system was used to reconstruct CT projection data from 21 patients into six radiation dose levels (12.5%, 25%, 37.5%, 50%, 75%, and 100%) on the basis of two CT acquisitions. A series of virtual liver lesions (five per patient, 105 total, lesion-to-liver prereconstruction contrast of -15 HU, 12-mm diameter) were inserted into the raw CT projection data and images were reconstructed with filtered back projection (FBP) (B31f kernel) and sinogram-affirmed IR (SAFIRE) (I31f-5 kernel). Image noise (pixel standard deviation), lesion contrast (after reconstruction), lesion boundary sharpness (average normalized gradient at lesion boundary), and contrast-to-noise ratio (CNR) were compared. Next, a two-alternative forced choice perception experiment was performed (16 readers [six radiologists, 10 medical physicists]). A linear mixed-effects statistical model was used to compare detection accuracy between FBP and SAFIRE and to estimate the radiation dose reduction potential of SAFIRE. Results Compared with FBP, SAFIRE reduced noise by a mean of 53% ± 5, lesion contrast by 12% ± 4, and lesion sharpness by 13% ± 10 but increased CNR by 89% ± 19. Detection accuracy was 2% higher on average with SAFIRE than with FBP (P = .03), which translated into an estimated radiation dose reduction potential (±95% confidence interval) of 16% ± 13. Conclusion SAFIRE increases detectability at a given radiation dose (approximately 2% increase in detection accuracy) and allows for imaging at reduced radiation dose (16% ± 13), while maintaining low-contrast detectability of subtle hypoattenuating focal liver lesions. This estimated dose reduction is somewhat smaller than that suggested by past studies. © RSNA, 2017 Online supplemental material is available for this article.