This paper presents a new algorithm called Standardized Shrinking LORETA-FOCUSS (SSLOFO) for solving the electroencephalogram (EEG) inverse problem. Multiple techniques are combined in a single procedure to robustly reconstruct the underlying source distribution with high spatial resolution. This algorithm uses a recursive process which takes the smooth estimate of sLORETA as initialization and then employs the re-weighted minimum norm introduced by FOCUSS. An important technique called standardization is involved in the recursive process to enhance the localization ability. The algorithm is further improved by automatically adjusting the source space according to the estimate of the previous step, and by the inclusion of temporal information. Simulation studies are carried out on both spherical and realistic head models. The algorithm achieves very good localization ability on noise-free data. It is capable of recovering complex source configurations with arbitrary shapes and can produce high quality images of extended source distributions. We also characterized the performance with noisy data in a realistic head model. An important feature of this algorithm is that the temporal waveforms are clearly reconstructed, even for closely spaced sources. This provides a convenient way to estimate neural dynamics directly from the cortical sources.