Our study concerns the mechanisms that underlie functional imaging of sensory areas of cortex using hemodynamic-based methods such as optical imaging of intrinsic signals, functional magnetic resonance imaging and positron emission tomography. In temporal cortex of chinchilla, we have used optical imaging of intrinsic signals evoked by acoustic stimulation to define the functionally responsive area and then made (scanning electron microscopy) observations of the corresponding capillary networks prepared by corrosion cast methods. We report that intrinsic signals associated with auditory cortex correlate directly with discrete capillary beds. These capillary beds, within the cortical surface layers, are distributed across the cortex in a non-uniform fashion. Within cortex both the arterial supply and the capillary network contain various flow control structures. Our study suggests a causal relationship between the metabolic demands of local neuronal activity and both the density of the capillary network and the placement of the control structures. Such relationships will affect the ultimate spatial resolution obtainable by hemodynamic-based functional brain imaging studies. These relationships will affect quantitative comparisons of activity levels in different areas of cortex.