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We present a new algorithm for the nonrigid registration of three-dimensional magnetic resonance (MR) intraoperative image sequences showing brain shift. The algorithm tracks key surfaces of objects (cortical surface and the lateral ventricles) in the image sequence using a deformable surface matching algorithm. The volumetric deformation field of the objects is then inferred from the displacements at the boundary surfaces using a linear elastic biomechanical finite-element model. Two experiments on synthetic image sequences are presented, as well as an initial experiment on intraoperative MR images showing brain shift. The results of the registration algorithm show a good correlation of the internal brain structures after deformation, and a good capability of measuring surface as well as subsurface shift. We measured distances between landmarks in the deformed initial image and the corresponding landmarks in the target scan. Cortical surface shifts of up to 10 mm and subsurface shifts of up to 6 mm were recovered with an accuracy of 1 mm or less and 3 mm or less respectively.