To investigate the spatiotemporal organisation of neuronal processes in an animal model using magnetoencephalography (MEG), a high temporal resolution (ms) and an appropriate spatial resolution of about 1 mm is necessary. With the aim of determining the localization error and the resolution power of high-resolution MEG systems, we developed a phantom capable of simulating the characteristics of animal models. The phantom enables us to variably position at least two magnetic field sources to within 0.1 mm. For source localization on the basis of the magnetic field data, a spatial filtering algorithm was used. The investigation of a 16-channel micro SQUID-MEG system with a current dipole orientated tangentially to the phantom surface produced the following localization data (min ... max, x, y--horizontal plane, z--depth); systematic localization error e(x) = 1.16 ... 1.67 mm, e(y) = -1.01 ... -1.28 mm, e(z) = -5.22 ... -7.64 mm, standard deviation of the individual measurements perpendicular to the dipole axis s(perp) = 0.05 ... 0.22 mm, along this axis s(long) = 0.20 ... 1.73 mm, in the depths sz = 0.17 ... 3.17 mm. The "goodness of fit" was > 95%. Separation of two dipoles was still possible for parallel dipoles at a distance apart of d(parallel) = 0.03 mm and for those oriented perpendicularly to each other at a distance apart of d(perp) = 0.10 mm. On the basis of these results we conclude that the MEG system can achieve a resolution sufficient to permit the investigation of neuronal microstructures. The spatial errors detected were related to sensor position in the cryostatic vessel as well as to external low-frequency noise.