We detect the free-induction signals of xenon atoms polarized by spin-exchange optical pumping. The temperature dependence of dissolution and spin-polarization transfer of xenon atoms to ethanol is measured by simultaneous detection of both xenon and proton signals. The polarization of proton is efficiently enhanced in the xenon-saturated solution at low magnetic fields. The large polarization and chemical shift enable us to obtain clearly the distribution image of xenon atoms near the gas-liquid and liquid-liquid boundaries. Therefore the localization of polarized xenon atoms is observed near the surface. By time-resolved magnetic resonance imaging of polarized xenon and polarization-enhanced proton, the spin dynamics is qualitatively studied for the nuclear spins interacting with each other in a dense solution. (C) 2004 American Institute of Physics.