In infants, the fontanels and sutures as well as conductivity of the skull influence the volume currents accompanying primary currents generated by active neurons and thus the associated electroencephalography (EEG) and magnetoencephalography (MEG) signals. We used a finite element method (FEM) to construct a realistic model of the head of an infant based on MRI images. Using this model, we investigated the effects of the fontanels, sutures and skull conductivity on forward and inverse EEG and MEG source analysis. Simulation results show that MEG is better suited than EEG to study early brain development because it is much less sensitive than EEG to distortions of the volume current caused by the fontanels and sutures and to inaccurate estimates of skull conductivity. Best results will be achieved when MEG and EEG are used in combination.