Although patient data have traditionally implicated the left prefrontal cortex in hypothesis generation, recent lesion data implicate right PFC in hypothesis generation tasks that involve set shifts. To test the involvement of the right prefrontal cortex in a hypothesis generation task involving set shifts, we scanned 13 normal subjects with fMRI as they completed Match Problems and a baseline task. In Match Problems subjects determined the number of possible solutions for each trial. Successful solutions are indicative of set shifts. In (...) the baseline condition subjects evaluated the accuracy of hypothetical solutions to match problems. A comparison of Match Problems versus baseline trials revealed activation in right ventral lateral PFC and left dorsal lateral PFC. A further comparison of successfully versus unsuccessfully completed Match Problems revealed activation in right ventral lateral PFC, left middle frontal gyrus and left frontal pole, thus identifying the former as a critical component of the neural mechanisms of set-shift transformation. By contrast, activation in right dorsal lateral PFC covaried as a function of the number of solutions generated in Match Problems, possibly due to increased working memory demands to maintain multiple solutions ‘on-line’, conflict resolution, or progress monitoring. These results go beyond the patient data by identifying the ventral lateral aspect of right PFC as being a critical component of the neural systems underlying lateral transformations, and demonstrate a dissociation between right VLPFC and DLPFC in hypotheses generation and maintenance. (shrink)