Several different techniques allow a functional assessment of neuronal activations by magnetic resonance imaging (fMRI). The by far most influential fMRI technique is based on a local T2*-sensitive hemodynamic response to neuronal activation, also known as the blood oxygenation level dependent or BOLD effect. Consequently, the term 'fMRI' is often used synonymously with BOLD imaging. Because interpretations of fMRI brain activation maps often appear intuitive and compelling, the reader might be tempted not to critically question the fundamental processes and assumptions. We review some essential processes and assumptions of BOLD fMRI and discuss related confounds and pitfalls in fMRI - from the underlying physiological effect, to data acquisition, data analysis and the interpretation of the results including clinical fMRI. A background framework is provided for the systematic and critical interpretation of fMRI results.