Fetal magnetoencephalography (fMEG) is the only non-invasive method for investigating evoked brain responses and spontaneous brain activity generated by the fetus in utero. Fetal auditory as well as visual-evoked fields have been successfully recorded in basic stimulus–response studies. Moreover, paradigms investigating precursors for cognitive development, such as habituation and mismatch response have been applied successfully with fMEG. These and other studies have shown that the prenatal stage of life could be an important indicator for later cognitive development. This review addresses the achievements of fMEG and constructively discusses its challenges. It concludes with proposals for future studies as well as with designated new applications. Fetal MEG is a promising, and to date it is the only non-invasive approach for the prenatal assessment of precursors for cognitive development. Future fMEG studies might even enable the diagnosis of developmental delays. Furthermore, fMEG could be critical for the implementation and evaluation of fetal intervention programmes in at-risk populations. Copyright © 2010 John Wiley & Sons, Ltd.