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Conventional model-based or statistical analysis methods for functional MRI (fMRI) suffer from the limitation of the assumed paradigm and biased results. Temporal clustering methods, such as fuzzy clustering, can eliminate these problems but are difficult to find activation occupying a small area, sensitive to noise and initial values, and computationally demanding. To overcome these adversities, a cascade clustering method combining a Kohonen clustering network and fuzzy c means is developed. Receiver operating characteristic (ROC) analysis is used to compare this method with correlation coefficient analysis and t test on a series of testing phantoms. Results show that this method can efficiently and stably identify the actual functional response with typical signal change to noise ratio, from a small activation area occupying only 0.2% of head size, with phase delay, and from other noise sources such as head motion. With the ability of finding activities of small sizes stably, this method can not only identify the functional responses and the active regions more precisely, but also discriminate responses from different signal sources, such as large venous vessels or different types of activation patterns in human studies involving motor cortex activation. Even when the experimental paradigm is unknown in a blind test such that model-based methods are inapplicable, this method can identify the activation patterns and regions correctly.