Functional Magnetic Resonance Imaging (fMRI) in the midbrain at 7 Tesla suffers from unexpectedly low temporal signal to noise ratio (TSNR) compared to other brain regions. Various methodologies were used in this study to quantitatively identify causes of the noise and signal differences in midbrain fMRI data. The influence of physiological noise sources was examined using RETROICOR, phase regression analysis, and power spectral analyses of contributions in the respiratory and cardiac frequency ranges. The impact of between-shot phase shifts in 3-D multi-shot sequences was tested using a one-dimensional (1-D) phase navigator approach. Additionally, the effects of shared noise influences between regions that were temporally, but not functionally, correlated with the midbrain (adjacent white matter and anterior cerebellum) were investigated via analyses with regressors of 'no interest'. These attempts to reduce noise did not improve the overall TSNR in the midbrain. In addition, the steady state signal and noise were measured in the midbrain and the visual cortex for resting state data. We observed comparable steady state signals from both the midbrain and the cortex. However, the noise was 2-3 times higher in the midbrain relative to the cortex, confirming that the low TSNR in the midbrain was not due to low signal but rather a result of large signal variance. These temporal variations did not behave as known physiological or other noise sources, and were not mitigated by conventional strategies. Upon further investigation, resting state functional connectivity analysis in the midbrain showed strong intrinsic fluctuations between homologous midbrain regions. These data suggest that the low TSNR in the midbrain may originate from larger signal fluctuations arising from functional connectivity compared to cortex, rather than simply reflecting physiological noise.