Many implementations of electroencephalogram (EEG) dipole source localization neglect the anisotropical conductivities inherent to brain tissues, such as the skull and white matter anisotropy. An examination of dipole localization errors is made in EEG source analysis, due to not incorporating the anisotropic properties of the conductivity of the skull and white matter. First, simulations were performed in a 5 shell spherical head model using the analytical formula. Test dipoles were placed in three orthogonal planes in the spherical head model. Neglecting the skull anisotropy results in a dipole localization error of, on average, 13.73 mm with a maximum of 24.51 mm. For white matter anisotropy these values are 11.21 mm and 26.3 mm, respectively. Next, a finite difference method (FDM), presented by Saleheen and Kwong (1997 IEEE Trans. Biomed. Eng. 44 800-9), is used to incorporate the anisotropy of the skull and white matter. The FDM method has been validated for EEG dipole source localization in head models with all compartments isotropic as well as in a head model with white matter anisotropy. In a head model with skull anisotropy the numerical method could only be validated if the 3D lattice was chosen very fine (grid size < or = 2 mm).