Deep brain stimulation (DBS) is a common therapy for treating movement disorders, such as Parkinson’s disease (PD), and provides a unique opportunity to study the neural activity of various subcortical structures in human patients. Local field potential (LFP) recordings are often performed with either intraoperative microelectrodes or DBS leads and reflect oscillatory activity within nuclei of the basal ganglia. These LFP recordings have numerous clinical implications and might someday be used to optimize DBS outcomes in closed-loop systems. However, the origin of the recorded LFP is poorly understood. Therefore, the goal of this study was to theoretically analyze LFP recordings within the context of clinical DBS applications. This goal was achieved with a detailed recording model of beta oscillations (∼20 Hz) in the subthalamic nucleus. The recording model consisted of finite element models of intraoperative microelectrodes and DBS macroelectrodes implanted in the brain along with multi-compartment cable models of STN projection neurons. Model analysis permitted systematic investigation into a number of variables that can affect the composition of the recorded LFP (e.g. electrode size, electrode impedance, recording configuration, and filtering effects of the brain, electrode-electrolyte interface, and recording electronics). The results of the study suggest that the spatial reach of the LFP can extend several millimeters. Model analysis also showed that variables such as electrode geometry and recording configuration can have a significant effect on LFP amplitude and spatial reach, while the effects of other variables, such as electrode impedance, are often negligible. The results of this study provide insight into the origin of the LFP and identify variables that need to be considered when analyzing LFP recordings in clinical DBS applications.