A novel three-dimensional (3-D) differential coil has been designed for improving the localization of magnetic stimulation. This new coil design consists of a butterfly coil with two additional wing units and an extra bottom unit, both perpendicular to the plane of the butterfly coil. The wing units produce opposite fields to restrict the spread of induced fields while the bottom unit enhances the induced fields at the excitation site. The peak induced field generated by this new design is located at the center of the coil, providing an easy identification of the excitation site. The field localization of the new coil Is comparable with that of much smaller coils but with an inductance compatible to current magnetic stimulators. Numerical computations based on the principles of electromagnetic induction and using a human nerve model were performed to analyze the induced fields and the stimulation thresholds of new coil designs. The localization of the coil design was assessed by a half power region (HPB), within which the magnitude of the normalized induced field is greater than 1//spl radic/2. The HPR for a 3-D differential coil built is improved (decreased) by a factor of three compared with a standard butterfly coil. Induced fields by this new coil were measured and in agreement with theoretical calculations.