Transcranial magnetic stimulation (TMS) is used to index several neurophysiological processes including excitability, inhibition and plasticity. However, these measures are conventionally limited to the motor cortex and recorded from peripheral muscles. This represents a significant limitation when non-motor neurophysiological processes are of primary interest. In the last several years, TMS has been combined with electroencephalography (EEG) to derive such measures directly from the cortex. Initial studies demonstrated that meaningful recordings could be derived without being substantially affected by TMS stimulus artifact due to advancements in EEG amplifier technology. Subsequently, TMS measures of cortical excitability were reliably recorded and found to be related with more conventional TMS electromyography recordings of excitability in the cortex. More recently, other key neurophysiological indices including cortical inhibition and interhemispheric connectivity have also been reported. In this article, such findings will be reviewed and their importance discussed vis a vis healthy and disease states. We will conclude by highlighting the limitations of this work and discuss their potential future applications as a biomarker of disease states.