A system and method for segmentation of anatomical structures in MRI volumes using graph cuts is disclosed. In this method, a template is registered to an MRI brain volume. The template identifies seed points of anatomical brain structures, such as the cerebrum, the cerebellum, and the brain stem, in the MRI brain volume. Any or all of the anatomical brain structures can be segmented using graph cuts segmentation initialized based on the seed points identified by the template. It is possible to segment each of the anatomical brain structures by performing a hierarchical three-phase segmentation process including brain/non-brain segmentation, cerebrum/cerebellum and brain stem segmentation, and cerebellum/brain stem segmentation.