The functional anatomy of syntactic transformations, a major computational operation invoked in sentence processing, was identified through a functional magnetic resonance imaging investigation. A grammaticality judgment task was used, presented through a novel hidden-blocks design. Subjects listened to transformational and nontransformational sentences in which a host of other complexity generators (number of words, prepositions, embeddings, etc.) were kept constant. A series of analyses revealed that the neural processing of transformations is localizable, evoking a highly lateralized and localized activation in the left inferior frontal gyrus (Broca's region) and bilateral activation in the posterior superior temporal sulcus. The pattern of activation associated with transformational analysis was distinct from the one observed in neighboring regions, and anatomically separable from the effects of verb complexity, which yielded significant activation in the left posterior superior temporal sulcus. Taken together with neuropsychological evidence, these results uncover the neural reality of syntactic transformations.