The pedunculopontine nucleus (PPN) is a promising new target for deep brain stimulation (DBS) in parkinsonian patients with gait disturbance and postural instability refractory to other treatment modalities. This region of the brain is unfamiliar territory to most functional neurosurgeons. This paper reviews the anatomy of the human PPN and describes novel, clinically relevant methods for the atlas-based and MRI-based localization of the nucleus. These two methods of PPN localization are evaluated and compared on stereotactic MRI data acquired from a diverse group of 12 patients undergoing implantation of deep brain electrodes at sites other than the PPN. Atlas-based coordinates of the rostral and caudal PPN poles in relation to fourth ventricular landmarks were established by amalgamating information sourced from two published human brain atlases. These landmarks were identified on acquired T1 images and atlas-derived coordinates used to plot the predicted PPN location on all 24 sides. Images acquired using a specifically modified, proton-density MRI protocol were available for each patient and were spatially fused to the T1 images. This widely available and rapid protocol provided excellent definition between gray and white matter within the region of interest. Together with an understanding of the regional anatomy, direct localization of the PPN was possible on all 24 sides. The coordinates for each directly localized nucleus were measured in relation to third and fourth ventricular landmarks. The mean (SD) of the directly localized PPN midpoints was 6.4 mm (0.5) lateral, 3.5 mm (1.0) posterior and 11.4 mm (1.2) caudal to the posterior commissure in the anterior commissure–posterior commissure plane. For the directly localized nucleus, there was similar concordance for the rostral pole of the PPN in relation to third and fourth ventricular landmarks (P>0.05). For the caudal PPN pole, fourth ventricular landmarks provided greater concordance with reference to the anteroposterior coordinate (P<0.001). There was a significant difference between localization of the PPN poles as predicted by atlas-based coordinates and direct MRI localization. This difference affected mainly the rostrocaudal coordinates; the mean lateral and anteroposterior coordinates of the directly localized PPN poles were within 0.5 mm of the atlas-based predicted values. Our findings provide simple, rapid and precise methods that are of clinical relevance to the atlas-based and direct stereotactic localization of the human PPN. Direct MRI localization may allow greater individual accuracy than that afforded by atlas-based coordinates when localizing the human PPN and may be relevant to groups evaluating the clinical role of PPN DBS.