We used two different methods of region of interest (ROI) definition to investigate the spatial accuracy of functional magnetic resonance imaging (fMRI) at low and high spatial resolution. The “single-condition localizer” consisted of block alternation between a target stimulus and a mean gray background. The “differential localizer” consisted of block alternation between the target stimulus and another stimulus that filled the complement of the visual field. A separate series of scans, in which the target stimulus was presented briefly with long inter-stimulus intervals, was used to measure the hemodynamic impulse response function (HIRF). As expected, the differential localizer defined more restricted ROIs that better matched the predicted cortical representation of the target stimulus. However, at low resolution (3-mm isotropic) many voxels that responded positively to the target stimulus in the differential protocol responded negatively to the target stimulus in the single-condition localizer and in the HIRF measurements. The localization errors were attributed to voxels near large veins, which were identified based on low mean intensity and high variance. At high resolution (1.2-mm isotropic), the effects of large veins were present, but affected a smaller number of voxels. Thus, the use of differential localizers does not necessarily result in a more accurate indication of the underlying neural activity. Localization errors are reduced at higher spatial resolutions and can be eliminated by identification and removal of voxels dominated by large veins.