This paper describes the non-commercial software system LIPSIA that was developed for the processing of functional magnetic resonance images (fMRI) of the human brain. The analysis of fMRI data comprises various aspects including filtering, spatial transformation, statistical evaluation as well as segmentation and visualization. In LIPSIA, particular emphasis was placed on the development of new visualization and segmentation techniques that support visualizations of individual brain anatomy so that experts can assess the exact location of activation patterns in individual brains. As the amount of data that must be handled is enormous, another important aspect in the development LIPSIA was the efficiency of the software implementation. Well established statistical techniques were used whenever possible.