MRI-guided neurosurgery not only represents a technical challenge but a transformation from conventional hand-eye coordination to interactive navigational operations. In the future, multimodality-based images will be merged into a single model, in which anatomy and pathologic changes are at once distinguished and integrated into the same intuitive framework. The long-term goals of improving surgical procedures and attendant outcomes, reducing costs, and achieving broad use can be achieved with a three-pronged approach: 1. Improving the presentation of preoperative and real-time intraoperative image information 2. Integrating imaging and treatment-related technology into therapy delivery systems 3. Testing the clinical utility of image guidance in surgery The recent focus in technology development is on improving our ability to understand and apply medical images and imaging systems. Areas of active research include image processing, model-based image analysis, model deformation, real-time registration, real-time 3D (so-called "four-dimensional") imaging, and the integration and presentation of image and sensing information in the operating room. Key elements of the technical matrix also include visualization and display platforms and related software for information and display, model-based image understanding, the use of computing clusters to speed computation (ie, algorithms with partitioned computation to optimize performance), and advanced devices and systems for 3D device tracking (navigation). Current clinical applications are successfully incorporating real-time and/or continuously up-dated image-based information for direct intra-operative visualization. In addition to using traditional imaging systems during surgery, we foresee optimized use of molecular marker technology, direct measures of tissue characterization (ie, optical measurements and/or imaging), and integration of the next generation of surgical and therapy devices (including image-guided robotic systems). Although we expect the primary clinical thrusts of MRI-guided therapy to remain in neurosurgery, with the possible addition of other areas like orthopedic, head, neck, and spine surgery, we also anticipate increased use of image-guided focal thermal ablative methods (eg, laser, RF, cryoablation, high-intensity focused ultrasound). By validating the effectiveness of MRI-guided therapy in specific clinical procedures while refining the technology that serves as its underpinning at the same time, we expect many neurosurgeons will eventually embrace MRI as their intraoperative imaging choice. Clearly, intraoperative MRI offers several palpable advantages. Most important among these are improved medical outcomes, shorter hospitalization, and better and faster procedures with fewer complications. Certain economic and practical barriers also impede the large-scale use of intraoperative MRI. Although there has been a concerted technical effort to increase the benefit/cost ratio by gathering more accurate information, designing more localized and less invasive treatment devices, and developing better methods to orient and position therapy end-effectors, further research is needed. Indeed, the drive to improve and upgrade technology is ongoing. Specifically, in the context of the real-time representation of the patient's anatomy, we have improved the quality and utility of the information presented to the surgeon, which, in turn, contributes to more successful surgical outcomes. We can also expect improvements in intraoperative imaging systems as well as increased use of nonimaging sensors and robotics to facilitate more widespread use of intraoperative MRI.