The temperature-dependent water proton frequency shift was investigated for temperature monitoring of interstitial thermal coagulation. A procedure for on-line temperature calculation was developed, and errors due to temperature-dependent susceptibility were investigated by finite element analysis and reference measurements. The temperature coefficient of magnetic susceptibility and proton chemical shift were determined for brain tissue and other substances. With the proposed procedure, the location of isotherms could be well visualized during laser-induced interstitial coagulation in vitro and in vivo. Systematic errors caused by magnetic susceptibility changes with temperature depend strongly on the characteristics of the heat source and can exceed susceptibility effects caused by physiologic tissue changes. For the laser applicators discussed here, however, a first order compensation for this effect was found to be satisfactory, because it reduces the absolute error to the range of +/- 1 degrees C. The proposed method represents a very promising approach for monitoring of the interstitial thermal coagulation.