Principles and clinical applications of functional MR imaging activation studies are presented. The physical and physiologic basis for cerebral blood volume-, cerebral blood flow-, and oxygenation-based functional MR imaging techniques are reviewed. The methodology of blood oxygen level dependent (BOLD) functional MR imaging is emphasized. Applications to presurgical mapping of sensorimotor and language function in patients with vascular malformations, tumors, and other lesions near critical cortical areas are illustrated. Important new applications to neuropsychiatric diseases are highlighted.