Functional magnetic resonance imaging (fMRI) hypothesis testing based on the blood oxygenation level dependent (BOLD) contrast mechanism typically involves a search for a positive effect during a specific task relative to a control state. However, aside from positive BOLD signal changes there is converging evidence that neuronal responses within various cortical areas also induce negative BOLD signals. Although it is commonly believed that these negative BOLD signal changes reflect suppression of neuronal activity direct evidence for this assumption is sparse. Since the somatosensory system offers the opportunity to quantitatively test sensory function during concomitant activation and has been well-characterized with fMRI in the past, the aim of this study was to determine the functional significance of ipsilateral negative BOLD signal changes during unilateral sensory stimulation. For this, we measured BOLD responses in the somatosensory system during unilateral electric stimulation of the right median nerve and additionally determined the current perception threshold of the left index finger during right-sided electrical median nerve stimulation as a quantitative measure of sensory function. As expected, positive BOLD signal changes were observed in the contralateral primary and bilateral secondary somatosensory areas, whereas a decreased BOLD signal was observed in the ipsilateral primary somatosensory cortex (SI). The negative BOLD signal changes were much more spatially extensive than the representation of the hand area within the ipsilateral SI. The negative BOLD signal changes in the area of the index finger highly correlated with an increase in current perception thresholds of the contralateral, unstimulated finger, thus supporting the notion that the ipsilateral negative BOLD response reflects a functionally effective inhibition in the somatosensory system.