Clinical observations of distortions of production and perception of prosody implicate that distinct, non-overlapping neural circuits are responsible for distinct prosodic cues and functions. These observations motivate a question whether similar evidence can be found in the neurologically intact brain. The experiment presented in this paper was constructed to check the neuroanatomical basis of the prosody generator, a functional unit in the phonological system which integrates and controls the variation of prosodic parameters [1]. The results show that relatively small, non-overlapping, fronto-basal areas of both the right and the left hemisphere are involved in the generation of prosody. Futhermore, we found clear evidence for the functional lateralization of prosody processing. Generating linguistically geared prosody revealed exclusively left hemisphere activation, while the production of affective prosody revealed right hemisphere activation only. Additionally, our results show interesting analogies with activation patterns of perception paradigms of recent functional imaging studies.