Contemporary imaging modalities can now provide the surgeon with high quality three- and four-dimensional images depicting not only normal anatomy and pathology, but also vascularity and function. A key component of image-guided surgery (IGS) is the ability to register multi-modal pre-operative images to each other and to the patient. The other important component of IGS is the ability to track instruments in real time during the procedure and to display them as part of a realistic model of the operative volume. Stereoscopic, virtual- and augmented-reality techniques have been implemented to enhance the visualization and guidance process. For the most part, IGS relies on the assumption that the pre-operatively acquired images used to guide the surgery accurately represent the morphology of the tissue during the procedure. This assumption may not necessarily be valid, and so intra-operative real-time imaging using interventional MRI, ultrasound, video and electrophysiological recordings are often employed to ameliorate this situation. Although IGS is now in extensive routine clinical use in neurosurgery and is gaining ground in other surgical disciplines, there remain many drawbacks that must be overcome before it can be employed in more general minimally-invasive procedures. This review overviews the roots of IGS in neurosurgery, provides examples of its use outside the brain, discusses the infrastructure required for successful implementation of IGS approaches and outlines the challenges that must be overcome for IGS to advance further.