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Numerical simulation studies were performed using a multiple-dipole source model and a spherical approximation of the head to determine how the resolution of simultaneously active neuromagnetic sources depends on source modeling assumptions (i.e., number of assumed dipoles), actual source parameters (e.g., location, orientation, and moment), and measurement errors. Forward calculations were made for a series of source configurations in which the number of dipoles, specific dipole parameters, and noise levels were systematically varied. Simulated noisy field distributions were fit by multiple dipole models of increasing model order (1,2, . . ., 6), and alternative statistical approaches (i.e., percent of variance, reduced chi-square, and F-ratio) were compared for their effectiveness in determining adequate model order. Limits of spatial resolution were established for a variety of multisource configurations and noise conditions. Implications for the analysis of empirical data are discussed.