The paper presents a method of evaluating the terrain correction integral using the Fast Fourier Transform. The method requires height data on a regular grid and produces terrain corrections on all grid points. For a 1 km grid spacing, the accuracy is generally better than 1.5 mgal for typically rough areas and is rather insensitive to errors in the data. The required CPU time is proportional to NlogN, where N is the number of grid points. This paper also discusses the covariance function computation by Fourier techniques. The method is most suitable for application in the solution of geodetic boundary value problems, but it can also be used for other types of geodetic or geophysical problems involving terrain corrections.