The biophysical and neurophysiological principles on which EEG is based are the two fundamental pillars of its correct use. It is not possible to make good use of EEG if both theories are not sufficiently well understood. The fundamental concepts underlying biophysical theory are electric field, scalar potential, and electric current. The multipole expansion of potential simplifies the study of potential sources based on their distance. So, we can find useful expressions for dipole potentials and fields. Biological systems have properties intermediate between conductive and dielectric systems, which explains the peculiarities of the currents generated and the complexity of their analysis and, remarkably, their reconstruction. The entire theory is summarized in Maxwell’s equations, which are one of the greatest intellectual achievements in physics. They are briefly stated. Finally, we will discuss the dipolar model, which is the most successful in neurophysiology and, more specifically, in the EEG.