Here we address the contentious issue of how nouns and verbs are represented in the brain. The co-occurrence of noun and verb deficits with damage to different neural regions has led to the view that they are differentially represented in the brain. Recent neuroimaging evidence and inconsistent lesion–behavior associations challenge this view. We have suggested that nouns and verbs are not differentially represented in the brain, but that different patterns of neural activity are triggered by the different linguistic functions carried by nouns and verbs. We test these claims in a functional magnetic resonance imaging study using homophones—words which function grammatically as nouns or verbs but have the same form and meaning—ensuring that any neural differences reflect differences in grammatical function. Words were presented as single stems and in phrases in which each homophone was preceded by an article to create a noun phrase (NP) or a pronoun to create a verb phrase (VP), thus establishing the word's functional linguistic role. Activity for single-word homophones was not modulated by their frequency of usage as a noun or verb. In contrast, homophones marked as verbs by appearing in VPs elicited greater activity in the left posterior middle temporal gyrus (LpMTG) compared to homophones marked as nouns by occurring in NPs. Neuropsychological patients with grammatical deficits had lesions which overlapped with the greater LpMTG activity found for VPs. These results suggest that nouns and verbs do not invariably activate different neural regions; rather, differential cortical activity depends on the extent to which their different grammatical functions are engaged.