Image processing strategies for functional magnetic resonance imaging (FMRI) data sets acquired using a gradient-recalled echo-planar imaging sequence are considered. The analysis is carried out using the mathematics of vector spaces. Data sets consisting of N sequential images of the same slice of brain tissue are analyzed in the time-domain and also, after Fourier transformation, in the frequency domain. A technique for thresholding is introduced that uses the shape of the response in a pixel compared with the shape of a reference waveform as the decision criterion. A method is presented to eliminate drifts in data that arise from subject movement. The methods are applied to experimental FMRI data from the motor-cortex and compared with more conventional image-subtraction methods. Several finger motion paradigms are considered in the context of the various image processing strategies. The most effective method for image processing involves thresholding by shape as characterized by the correlation coefficient of the data with respect to a reference waveform followed by formation of a cross-correlation image. Emphasis is placed not only on image formation, but also on the use of signal processing techniques to characterize the temporal response of the brain to the paradigm.