The paper describes the method of determining direction and frequency content of the brain activity flow. The method was formulated in the framework of the AR model. The transfer function matrix was found for multichannel EEG process. Elements of this matrix, properly normalized, appeared to be good estimators of the propagation direction and spectral properties of the investigated signals. Simulation experiments have shown that the estimator proposed by us unequivocally reveals the direction of the signal flow and is able to distinguish between direct and indirect transfer of information. The method was applied to the signals recorded in the brain structures of the experimental animals and also to the human normal and epileptic EEG. The sensitivity of the method and its usefulness in the neurological and clinical applications was demonstrated.