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Despite the long history of rheoencephalography (REG), some important aspects of the method are still debatable. Bioimpedance measurements offer great potential benefit for study of the human brain, but the traditional four or six electrode method suffers from potential misinterpretations and lack of accuracy. The objective of this paper is to study the possible mechanism of REG formation by means of numerical modelling using a realistic finite element model of the human head. It is shown that the cardiac related variations in electrical resistivity of the scalp contributes more than 60% to the REG amplitude, whereas the brain and cerebrospinal fluid are mutually compensated by each over.