Interpretation of the blood oxygen level dependent (BOLD) response measured using functional magnetic resonance imaging (fMRI) requires an understanding of the underlying neuronal activity. Here we report on a study using both magnetoencephalography (MEG) and BOLD fMRI, to measure the brain's functional response to electrical stimulation of the median nerve in a paired pulse paradigm. Interstimulus Intervals (ISIs) of 0.25, 0.5, 0.75, 1.0, 1.5 and 2.0 s are used to investigate how the MEG detected neural response to a second pulse is affected by that from a preceding pulse and if these MEG modulations are reflected in the BOLD response. We focus on neural oscillatory activity in the β-band (13–30 Hz) and the P35m component of the signal averaged evoked response in the sensorimotor cortex. A spatial separation of β ERD and ERS following each pulse is demonstrated suggesting that these two effects arise from separate neural generators, with ERS exhibiting a closer spatial relationship with the BOLD response. The spatial distribution and extent of BOLD activity were unaffected by ISI, but modulations in peak amplitude and latency were observed. Non-linearities in both induced oscillatory activity ERS and in the signal averaged evoked response are found for ISIs of up to 2 s when the signal averaged evoked response has returned to baseline, with the P35m component displaying paired pulse depression effects. The β-band ERS magnitude was modulated by ISI, however the ERD magnitude was not. These results support the assumption that BOLD non-linearity arises not only from a non-linear vascular response to neural activity but also a non-linear neural response to the stimulus with ISI up to 2 s.