In Parkinson's disease, the depletion of iron-rich dopaminergic neurons in nigrosome 1 of the substantia nigra precedes motor symptoms by two decades. Methods capable of monitoring this neuronal depletion, at an early disease stage, are needed for early diagnosis and treatment monitoring. Magnetic resonance imaging (MRI) is particularly suitable for this task due to its sensitivity to tissue microstructure and in particular, to iron. However, the exact mechanisms of MRI contrast in the substantia nigra are not well understood, hindering the development of powerful biomarkers. In the present report, we illuminate the contrast mechanisms in gradient and spin echo MR images in human nigrosome 1 by combining quantitative 3D iron histology and biophysical modeling with quantitative MRI on post mortem human brain tissue. We show that the dominant contribution to the effective transverse relaxation rate (R2*) in nigrosome 1 originates from iron accumulated in the neuromelanin of dopaminergic neurons. This contribution is appropriately described by a static dephasing approximation of the MRI signal. We demonstrate that the R2* contribution from dopaminergic neurons reflects the product of cell density and cellular iron concentration. These results demonstrate that the in vivo monitoring of neuronal density and iron in nigrosome 1 may be feasible with MRI and provide directions for the development of biomarkers for an early detection of dopaminergic neuron depletion in Parkinson's disease.