© 2017 American Academy of Neurology. Objective: To assess the diagnostic accuracy and prognostic value of functional MRI (fMRI) in determining lateralization and predicting postsurgical language and memory outcomes. Methods: An 11-member panel evaluated and rated available evidence according to the 2004 American Academy of Neurology process. At least 2 panelists reviewed the full text of 172 articles and selected 37 for data extraction. Case reports, reports with <15 cases, meta-analyses, and editorials were excluded. Results and recommendations: The use of fMRI may be considered an option for lateralizing language functions in place of intracarotid amobarbital procedure (IAP) in patients with medial temporal lobe epilepsy (MTLE; Level C), temporal epilepsy in general (Level C), or extratemporal epilepsy (Level C). For patients with temporal neocortical epilepsy or temporal tumors, the evidence is insufficient (Level U). fMRI may be considered to predict postsurgical language deficits after anterior temporal lobe resection (Level C). The use of fMRI may be considered for lateralizing memory functions in place of IAP in patients with MTLE (Level C) but is of unclear utility in other epilepsy types (Level U). fMRI of verbal memory or language encoding should be considered for predicting verbal memory outcome (Level B). fMRI using nonverbal memory encoding may be considered for predicting visuospatial memory outcomes (Level C). Presurgical fMRI could be an adequate alternative to IAP memory testing for predicting verbal memory outcome (Level C). Clinicians should carefully advise patients of the risks and benefits of fMRI vs IAP during discussions concerning choice of specific modality in each case.