THE DIFFERENT SOURCES of spatial distortion in magnetic resonance images are reviewed from the point of view of stereotactic target localization. The extents of the two most complex sources of spatial distortion, gradient field nonlinearities and magnetic field inhomogeneities, are discussed both qualitatively and quantitatively. Several ways by which the spatial distortion resulting from these sources can be minimized are discussed. The clinical relevance of the spatial distortion along with some strategies to minimize the localization errors in magnetic resonance-guided stereotaxy are presented.