Brain oscillatory correlates of spatial navigation were investigated using blind source separation (BSS) and standardized low resolution electromagnetic tomography (sLORETA) analyses of 62-channel EEG recordings. Twenty-five participants were instructed to navigate to distinct landmark buildings in a previously learned virtual reality town environment. Data from periods of navigation between landmarks were subject to BSS analyses to obtain source components. Two of these cortical sources were found to exhibit significant spectral power differences during navigation with respect to a resting eyes open condition and were subject to source localization using sLORETA. These two sources were localized as a right parietal component with gamma activation and a right medial-temporal–parietal component with activation in theta and gamma bandwidths. The parietal gamma activity was thought to reflect visuospatial processing associated with the task. The medial-temporal–parietal activity was thought to be more specific to the navigational processing, representing the integration of ego- and allo-centric representations of space required for successful navigation, suggesting theta and gamma oscillations may have a role in integrating information from parietal and medial-temporal regions. Theta activity on this medial-temporal–parietal source was positively correlated with more efficient navigation performance. Results are discussed in light of the depth and proposed closed field structure of the hippocampus and potential implications for scalp EEG data. The findings of the present study suggest that appropriate BSS methods are ideally suited to minimizing the effects of volume conduction in noninvasive recordings, allowing more accurate exploration of deep brain processes.