This article reviews the application of magnetoencephalography (MEG) in clinical epileptology and epilepsy research. MEG recordings of interictal as well as ictal epileptiform discharges helped to improve non-invasive localization of epileptic foci in patients with focal epilepsy. Several studies showed good agreement of the localizations obtained from MEG compared with those from invasive electrical recordings. Thus, MEG may become a potentially useful technique in the pre-surgical evaluation of epilepsy patients. As evidenced from studying the penicillin focus in animals and spike propagation in humans, MEG also may contribute to further understand the basic mechanisms of epilepsy and thus may be useful in epilepsy research. Directions of future research include recording from a large number of channels covering a wide area of the head, long-term recording to study mechanisms involved in the transition of interictal to ictal state, and recording of slow magnetic field shifts associated with interictal and ictal epileptiform discharges.