Magnetoencephalography (MEG) provides extremely fine temporal resolution and reasonable spatial resolution within the same recording, which makes it fairly unique among the various imaging strategies. MEG is more comfortable for children than electroencephalography (EEG) since it does not involve scalp abrasion, which is particularly bothersome in studies using high sensor densities. MEG provides high temporal resolution and moderate spatial resolution in a relatively comfortable, nonthreatening environment, characteristics that should make it ideal for use in child psychiatry. This chapter talks about the neurophysiologic and neuroanatomic basis of MEG signals. Instrumentation in MEG has evolved significantly since the early 1980s from single channel neuromagnetometer systems to large, high-density whole-head arrays. The most common data analysis technique in MEG involves signal averaging to improve the signal-to-noise ratios (SNR). The chapter presents the comparison of MEG- and EEG. EEG reflects primarily extracellular current and MEG measures intracellular current.