Conventional interpretation aids used in transient electromagnetic (TEM) exploration assume that the anomalous response is due to induction in a simple model such as a plate, sphere, or uniform layer. Estimates of conductivity, depth, and size are based on analyzing the profile shape and transient decay constant. In regions with conductive overburden or conductive bedrock, TEM responses obtained with the large-loop configuration can often be very dependent upon the location of the transmitter loop, and the results can be easily misinterpreted.A series of scale-model studies was carried out to investigate the influence of current channeling and gathering phenomena with the large fixed loop and moving single-loop configurations of the TEM method. Models studied included resistive and step discontinuities in a horizontal conductive slab, and a vertical plate in electrical contact with conductive overburden.Large TEM anomalies can be observed at the edge of a conductive unit, when diffusing eddy currents migrating through surface conductors are channeled and become spatially localized. Current gathering occurs when the diffusing eddy currents are gathered into a locally more conductive zone. The most common geometric condition under which these effects are observed is when a conductor of long strike length is located outside a large transmitter loop. The TEM response is enhanced by channeling and gathering, and it is often stronger than simple inductive effects.Current channeling and current gathering phenomena are relatively unimportant when measurements are made within a large transmitter loop, or when a single- or in-loop configuration is used. It is therefore recommended that multiple transmitter loop locations be used when surveying in conductive terrains with the large-loop configuration, or alternatively that the single- or in-loop configuration be employed for additional geophysical control.