The electroencephalography source estimation problem consists of inferring cortical activation from measurements of electrical potential taken on the scalp surface. This inverse problem is intrinsically ill-posed. In particular the dimensionality of cortical sources greatly exceeds the number of electrode measurements, and source estimation requires regularization to obtain a unique solution. In this work, we introduce a novel regularization function called cortical graph smoothing, which exploits knowledge of anatomical connectivity available from diffusion-weighted imaging. Given a weighted graph description of the anatomical connectivity of the brain, cortical graph smoothing penalizes the weighted sum of squares of differences of cortical activity across the graph edges, thus encouraging solutions with consistent activation across anatomically connected regions. We explore the performance of the cortical graph smoothing source estimates for analysis of the event related potential for simple motor tasks, and compare against the commonly used minimum norm, weighted minimum norm, LORETA and sLORETA source estimation methods. Evaluated over a series of 18 subjects, the proposed cortical graph smoothing method shows superior localization accuracy compared to the minimum norm method, and greater relative peak intensity than the other comparison methods.