Abstract Reduced sensory gating appears to be among the core features in schizophrenia. The sources of sensory gating however are largely unknown. The aim of the current study was to identify these sources, with concurrent EEG and fMRI methodology. Twenty healthy male volunteers were tested with identical P50 suppression paradigms in two separate sessions: an EEG setting, and an EEG concurrent with fMRI setting. The stimuli in the P50 paradigm consisted of weak electrical stimulation of the left median nerve. The stimuli were presented in pairs with either 500ms or 1000ms interstimulus intervals (ISI). No difference was found between the EEG setting and the concurrent EEG and fMRI setting. P50 suppression was, in both settings, found only in the 500ms trials, not in the 1000ms trials. EEG-dipole modeling resulted in 4 sources located in the medial frontal gyrus, the insula, the hippocampus, and primary somatosensory cortex. These sources corresponded to significant fMRI clusters located in the medial frontal gyrus, the insula, the claustrum, and the hippocampus. Activity in the hippocampus and the claustrum was higher in the trials with suppression, suggesting that these brain areas are involved in the inhibitory processes of P50 suppression. The opposite was found for activity in the medial frontal gyrus and the insula, suggesting that these brain areas are involved in the generation of the P50 amplitude. To our knowledge, this is the first study demonstrating that P50 suppression can be reliably assessed inside an MRI scanner.