PURPOSE: To evaluate the effect of the gradient switching noise on the ECD source localization with the EEG data recorded during the MRI scan. MATERIALS AND METHODS: We have fabricated a spherical EEG phantom that emulates a human head on which multiple electrodes are attached. Inside the phantom, electric current dipole(ECD) sources are located to evaluate the source localization error. The EEG phantom was placed in the center of the wholebody 3.0 Tesla MRI magnet, and a sinusoidal current was fed to the ECD sources. With an MRI-compatible EEG measurement system, we recorded the multi channel electric potential signals during gradient echo single-shot EPI scans. To evaluate the effect of the gradient switching noise on the ECD source localization, we controlled the gradient noise level by changing the FOV of the EPI scan. With the measured potential signals, we have performed the ECD source localization. RESULTS: The source localization error depends on the gradient switching noise level and the ECD source position. The gradient switching noise has much bigger negative effects on the source localization than the Gaussian noise. We have found that the ECD source localization works reasonably when the gradient switching noise power is smaller than 10% of the EEG signal power. CONCLUSION: We think that the results of the present study can be used as a guideline to determine the degree of gradient switching noise suppression in EEG when the EEG data are to be used to enhance the performance of fMRI.