While hallucinations have been described for over two millennia, their cause remains unclear. Brain-based models suggest that abnormal cerebral excitation and a lack of normal cerebral inhibition may play primary roles, but evaluation of these hypotheses has been hampered by difficulty in studying the hallucinatory state. Recent advances in neuroimaging have provided researchers with tools to study a variety of mental states, including hallucinations. We review the literature regarding the structural and functional neural correlates of hallucinations. Despite small sample sizes and methodological differences, several studies describe similar results: hallucinations are associated with sensory modality-specific activation in cerebral areas involved in normal sensory processing. Furthermore, neural activation may be specifically related to distinct phenomenological features of the hallucinatory experience. Further work is needed to better understand the neural basis of hallucinations.