Beamforming is one of the most commonly used source reconstruction methods for magneto- and electroencephalography (M/EEG). One underlying assumption, however, is that distant sources are uncorrelated and here we tested whether this is an appropriate model for the human hippocampal data. We revised the Empirical Bayesian Beamfomer (EBB) to accommodate specific a-priori correlated source models. We showed in simulation that we could use model evidence (as approximated by Free Energy) to distinguish between different correlated and uncorrelated source scenarios. Using group MEG data in which the participants performed a hippocampal-dependent task, we explored the possibility that the hippocampus or the cortex or both were correlated in their activity across hemispheres. We found that incorporating a correlated hippocampal source model significantly improved model evidence. Our findings help to explain why, up until now, the majority of MEG-reported hippocampal activity (typically making use of beamformers) has been estimated as unilateral
