When connectivity analysis is carried out for event related EEG and MEG, the presence of strong spatial correlations from spontaneous activity in background may mask the local neuronal evoked activity and lead to spurious connections. In this paper, we hypothesized PCA decomposition could be used to diminish the background activity and further improve the performance of connectivity analysis in event related experiments. The idea was tested using simulation, where we found that for the 306-channel Elekta Neuromag system, the first 4 PCs represent the dominant background activity, and the source connectivity pattern after preprocessing is consistent with the true connectivity pattern designed in the simulation. Improving signal to noise of the evoked responses by discarding the first few PCs demonstrates increased coherences at major physiological frequency bands when removing the first few PCs. Furthermore, the evoked information was maintained after PCA preprocessing. In conclusion, it is demonstrated that the first few PCs represent background activity, and PCA decomposition can be employed to remove it to expose the evoked activity for the channels under investigation. Therefore, PCA can be applied as a preprocessing approach to improve neuronal connectivity analysis for event related data.