The Gamma Knife is currently the only radiosurgical device which has been used in functional neurosurgery. This mode of utilization is possible because the instrument can make lesions in normal brains with a volume as small as 50 mm3. The experience of functional radiosurgery accumulated at the Karolinska Institute over 21 years is reviewed, and the possible implications of the new developments in imaging techniques for the future of functional radiosurgery are considered. The review covers gamma thalamotomy for pain and tremor, radiosurgery for trigeminal neuralgia, gamma capsulotomy for severe anxiety and obsessive-compulsive neurosis, and Gamma Knife surgery for focal epilepsy. The important role of stereotactic MRI localization in functional radiosurgery is pointed out, and a preliminary report of the recent experience with stereotactic magnetoencephalography combined with stereotactic MRI for physiological and anatomic target localization is given. It is concluded that functional radiosurgery should only be performed with radiation of very small volumes of brain, as the very high doses required would be devastating if delivered to even small volumes.