A method for the spatial analysis of EEG and EP data, based on the spherical harmonic Fourier expansion (SHE) of scalp potential measurements, is described. This model provides efficient and accurate formulas for: (1) the computation of the surface Laplacian and (2) the interpolation of electrical potentials, current source densities, test statistics and other derived variables. Physiologically based simulation experiments show that the SHE method gives better estimates of the surface Laplacian than the commonly used finite difference method. Cross-validation studies for the objective comparison of different interpolation methods demonstrate the superiority of the SHE over the commonly used methods based on the weighted (inverse distance) average of the nearest three and four neighbor values.