Epilepsy surgery requires the precise localization of the epileptogenic zone and the anatomical localization of eloquent cortex so that these areas can be preserved during cortical resection. Magnetoencephalography (MEG) is a technique that maps interictal magnetic dipole sources onto MR imaging to produce a magnetic source image. Magneto-encephalographic spike sources can be used to localize the epileptogenic zone and be part of the workup of the patient for epilepsy surgery in conjunction with data derived from an analysis of seizure semiology, scalp video electroencephalography, PET, functional MR imaging, and neuropsychological testing. In addition, magnetoencephalographic spike sources can be linked to neuronavigation platforms for use in the neurosurgical field. Finally, paradigms have been developed so that MEG can be used to identify functional areas of the cerebral cortex including the somatosensory, motor, language, and visual evoked fields. The authors review the basic principles of MEG and the utility of MEG for presurgical planning as well as intra-operative mapping and discuss future applications of MEG technology.