Transcranial magnetic stimulation (TMS) is a new method for investigating cortical information processing and for investigating therapeutic applications in psychiatry and neurology. A common problem of most studies in this field regards the localization of the magnetic coil with respect to the cortex. This article reviews the currently used methods and proposes a neuronavigational approach. The method of neuronavigated TMS is described and discussed in detail. It is used to guide the magnetic coil on an individual basis to a structurally or functionally predetermined cortical area while monitoring the location of the coil in relation to the subject's head in real time. Possible applications of TMS in combination with functional neuroimaging in clinical research within a cognitive neuroscience framework are discussed. Future applications of TMS should take individual anatomy into account, and neuronavigation provides the means to do so.