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This study investigated effects of familiarity and orientation on face processing by means of magnetoencephalography. Participants were presented with photographs of personally familiar, famous and unfamiliar faces in both upright and inverted orientation. They had to decide whether faces were familiar by means of manual yes/no responses. Independent of orientation, we observed a clear modulation of the M170 by familiarity, with personally familiar faces evoking larger amplitudes than unknown faces. The M170 was also sensitive to orientation, with larger amplitudes for inverted than upright faces. Moreover, the M170 exhibited larger amplitudes over the right than over the left hemisphere, but this asymmetry was present for upright faces only. The present data suggest that at least for personally familiar faces, neural correlates of identification start no later than ∼ 170 ms, and underline a special role of the …