OBJECTIVE: To expand the use of magnetoencephalography (MEG) functional mapping in the operating room as well as preoperatively, a method of integrating the MEG sensorimotor mapping information into a stereotactic database, using computed tomographic scans, magnetic resonance imaging scans, and digital angiography, was developed. The combination of functional mapping and the stereotactic technique allows simultaneous viewing of the spatial relationship between the MEG-derived functional mapping, the radiological/structural anatomic characteristics, and the pathological abnormality. METHODS: MEG data were collected using a MAGNES II Biomagnetometer and were incorporated into the COMPASS frame-based and REGULUS frameless stereotactic systems. The transformation process, by calculating a translational vector and a rotation matrix, integrates functional and anatomic information that is then directly available intraoperatively in the stereotactic database. This procedure was employed in 10 patients undergoing computer-assisted stereotactic volumetric resections for lesions involving the sensorimotor cortex. The principles of coregistration and coordinate transformation are reviewed in the context of preoperative functional mapping. We introduce innovations to apply these techniques to intraoperative stereotactic systems. RESULTS: Tests of the accuracy of the intraoperative integration of functional information in patients and calibration phantoms indicated close agreement with earlier preoperative methods. The intraoperative availability of functional information was a significant aid to the surgeon because it provided more accurate information on the location of functional tissue than could be derived solely by radiological criteria. CONCLUSION: The real-time availability of functional mapping information in an interactive fashion can reduce surgical risk and minimize functional morbidity. Within the ever-expanding realm of functional mapping and image-guided neurosurgery, further progress and integration of these methods is critical for resection of lesions involving eloquent cortex.