Deep brain stimulation (DBS) has developed over the last twenty years into a highly effective evidenced-based treatment option for neuropsychiatric disorders. Moreover, it has become a fascinating tool to provide illustrative insights into the functioning of brain networks. New anatomical and pathophysiological models of DBS action have accelerated our understanding of neurological and psychiatric disorders and brain functioning. The description of the brain networks arose through the unique ability to illustrate long-range interactions between interconnected brain regions as derived from state-of-the-art neuroimaging (structural, diffusion, and functional MRI) and the opportunity to record local and large-scale brain activity at millisecond temporal resolution (microelectrode recordings, local field potential, electroencephalography, and magnetoencephalography). In the first part of this review, we describe how neuroimaging techniques have led to current understanding of DBS effects, by identifying and refining the DBS targets and illustrate the actual view on the relationships between electrode locations and clinical effects. One step further, we discuss how neuroimaging has shifted the view of localized DBS effects to a modulation of specific brain circuits, which has been possible from the combination of electrode location reconstructions with recently introduced network imaging methods. We highlight how these findings relate to clinical effects, thus postulating neuroimaging as a key factor to understand the mechanisms of DBS action on behavior and clinical effects. In the second part, we show how invasive electrophysiology techniques have been efficiently integrated into the DBS set-up to precisely localize the neuroanatomical targets of DBS based on distinct region-specific patterns of neural activity. Next, we show how multi-site electrophysiological recordings have granted a real-time window into the aberrant brain circuits within and beyond DBS targets to quantify and map the dynamic properties of rhythmic oscillations. We also discuss how DBS alters the transient synchrony states of oscillatory networks in temporal and spatial domains during resting, task-based and motion conditions, and how this modulation of brain states ultimately shapes the functional response. Finally, we show how a successful decoding and management of electrophysiological proxies (beta bursts, phase-amplitude coupling) of aberrant brain circuits was translated into adaptive DBS stimulation paradigms for a targeted and state-dependent invasive electrical neuromodulation.