Distortions of the magnetic field, such as those caused by susceptibility artifacts and peripheral magnetic field warping, can limit geometric precision in the use of magnetic resonance (MR) imaging in stereotactic procedures. The authors have routinely found systematic error in MR stereotactic coordinates with a median of 4 mm compared to computerized tomography (CT) coordinates. This error may place critical neural structures in jeopardy in sme procedures. A description is given of an image fusion technique that uses a chamfer matching algorithm; the advantages of MR imaging in anatomical definition are combined with the geometric precision of CT, while eliminating most of the anatomical spatial distortion of stereotactic MR imaging. A stereotactic radiosurgical case is presented in which the use of MR localization alone would have led to both irradiation of vital neural structures outside the desired target volume and underdose of the intended target volume. The image fusion approach allows for the use of MR imaging, combined with stereotactic CT, as a reliable localizing technique for stereotactic neurosurgery and radiosurgery.