Transcranial magnetic stimulation (TMS) is a unique method for non-invasive brain imaging. The fundamental difference between TMS and other available non-invasive brain imaging techniques is that when a physiological response is evoked by stimulation of a cortical area, that specific cortical area is causally related to the response. With other imaging methods, it is only possible to detect and map a brain area that participates in a given task or reaction. TMS has been shown to be clinically accurate and effective in mapping cortical motor areas and applicable to the functional assessment of motor tracts following stroke, for example. Many hundreds of studies have been published indicating that repetitive TMS (rTMS) may also have multiple therapeutic applications. Techniques and protocols for individually targeting and dosing rTMS urgently need to be developed in order to ascertain the accuracy, repeatability and reproducibility required of TMS in clinical applications. We review the basic concepts behind navigated TMS and evaluate the currently accepted physical and physiological factors contributing to the accuracy and reproducibility of navigated TMS. The advantages of navigated TMS over functional MRI in motor cortex mapping are briefly discussed. Illustrative cases utilizing navigated TMS are shown in presurgical mapping of the motor cortex, in therapy for depression, and in the follow-up of recovery from stroke.