Many groups are trying out functional MRI (fMRI) to study normal and diseased brain function. FMRI is a technique that images intrinsic blood signal changes accompanying variations of cerebral blood flow (CBF), cerebral blood volume (CBV) and oxygenation during mental activity. The main advantages which account for fMRI's increasing popularity are its time resolution (less than 1 second), a fine spatial resolution (on the scale of 1 mm), and the ability to acquire, within the same individual, repeated, multiple scans in a non-invasive manner. While the basic design of most studies centers on comparison of baseline to an active (test) condition, as the Positron Emission Tomography (PET), fMRI allows an important departure from the single scan per condition study-design, into more flexible paradigms of multiple scans over varying time intervals and multiple conditions. Although the technique is only a few years old, a large volume of experimental data have already been published. In this presentation we would like to provide potential users with a short overview of the basic principles and the main applications in cognitive neuroscience, as well as potential clinical applications.