Near-infrared spectroscopy (NIRS) was originally designed for clinical monitoring of tissue oxygenation, and it has also been developed into a useful tool in neuroimaging studies, with the so-called functional NIRS (fNIRS). With NIRS, cerebral activation is detected by measuring the cerebral hemoglobin (Hb), where however, the precise correlation between NIRS signal and neural activity remains to be fully understood. This can in part be attributed to the situation that NIRS signals are inherently subject to contamination by signals arising from extracerebral tissue. In recent years, several approaches have been investigated to distinguish between NIRS signals originating in cerebral tissue and signals originating in extracerebral tissue. Selective measurements of cerebral Hb will enable a further evolution of fNIRS. This chapter is divided into six sections: first a summary of the basic theory of NIRS, NIRS signals arising in the activated areas, correlations between NIRS signals and fMRI signals, correlations between NIRS signals and neural activities, and the influence of a variety of extracerebral tissue on NIRS signals and approaches to this issue are reviewed. Finally, future prospects of fNIRS are described.