There is a strong overlap between imagined and hallucinatory phenomena in the sense that both are internal representations of external things that are not present at the time. Relationships between hallucinations and wider aspects of imagination are complex and individual, with a lack of systematic evidence. There appears to be a close relationship between the brain areas responsible for veridical, imagined, and hallucinatory perception, though more data is needed. However, how activity varies within and outside these areas in order to create different types of imagination is not at all clear. Drug effects provide one avenue for systematically exploring links between hallucinations and imagination. Drugs that cause hallucinations also tend to affect wider imagination and creativity, though results are variable and are open to alternative explanations. Nevertheless, these effects suggest that wider, non-perceptual, brain systems are involved in the generation of imaginative responses to hallucinations. Future investigations need to define imagination more closely, have tighter designs, and combine approaches.