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Event-related functional magnetic resonance imaging is a recent and popular technique for detecting haemodynamic responses to brief stimuli or events. However, the design of event-related experiments requires careful consideration of numerous issues of measurement, modelling and inference. Here we review these issues, with particular emphasis on the use of basis functions within a general linear modelling framework to model and make inferences about the haemodynamic response. With these models in mind, we then consider how the properties of functional magnetic resonance imaging data determine the optimal experimental design for a specific hypothesis, in terms of stimulus ordering and interstimulus interval. Finally, we illustrate various event-related models with examples from recent studies.