The aim of the present investigation was to localize the sources of the N400 response elicited in a sentence-reading paradigm. Eight neurologically healthy adults viewed sentences that were presented one word at a time in the center of a computer screen. Half of the sentences ended with a semantically inappropriate word, while the other half had appropriate endings. Event-related potentials recorded at Fz and Pz showed a negative-going deflection, the amplitude of which was strongly affected by semantic congruity (N400). Evoked magnetic fields that were simultaneously recorded over the left hemisphere showed clear magnetic field extrema in seven subjects during the time course of the N400. Underlying sources were successfully modeled as single equivalent current dipoles. Anatomical regions that contained the dipoles were localized by superimposing dipole coordinates onto magnetic resonance scans. Dipole regions were found in temporal lobe structures, in the vicinity of the hippocampus and the parahippocampal gyrus (in two subjects) and in posterior temporal neocortical regions (in the vicinity of the middle temporal gyrus; in five subjects). These findings are consistent with the view that posterior association cortices in the left hemisphere are involved in word recognition and semantic comprehension during reading.