Hyperpolarized 129Xe MRI has emerged as a novel means to evaluate pulmonary function via 3D mapping of ventilation, interstitial barrier uptake, and RBC transfer. However, the physiological interpretation of these measurements has yet to be firmly established. Here we propose a model that uses the three components of 129Xe gas exchange MRI to estimate accessible alveolar volume (VA), membrane conductance, and capillary blood volume contributions to DLCO 129Xe ventilated volume (VV) was related to VA by a scaling factor kV=1.47 with 95% confidence interval [1.42, 1.52], relative 129Xe barrier uptake (normalized by the healthy reference value) was used to estimate the membrane specific conductance coefficient kB=10.6 [8.6, 13.6] mL/min/mmHg/L, while normalized RBC transfer was used to calculate the capillary blood volume specific conductance coefficient kR=13.6 [11.4, 16.7] mL/min/mmHg/L. In this way, the barrier and RBC transfer per unit volume determined the transfer coefficient KCO, which was then multiplied by image-estimated VA to obtain DLCO. The model was built on a cohort of 41 healthy subjects and 101 patients with pulmonary disorders. The resulting 129Xe-derived DLCO correlated strongly (R2=0.75, p<0.001) with the measured values, a finding that was preserved within each individual disease cohort. The ability to use 129Xe MRI measures of ventilation, barrier uptake and RBC transfer to estimate each of the underlying constituents of DLCO both clarifies the interpretation of these images, while enabling its use to monitor these aspects of gas exchange independently and regionally.