Distortions of magnetotelluric fields caused by three‐dimensional (3‐D) structures can be severe and are not predictable using one‐dimensional or two‐dimensional modeling. I used a 3-D modeling algorithm based upon an extension of a generalized thin sheet analysis due to Ranganayaki and Madden (1980) to examine field distortions in crustal environments. Three major physical mechanisms cause these distortions. These mechanisms are resistive coupling between the electrical mantle and upper crust, resistive coupling between conductive features within the upper crust, and local induction of current loops within good conductors. Each mechanism produces different spatial and frequency effects upon the background field, so identification of the dominant mechanism can be used as an interpretational aid. I finally use this analysis to identify distortion mechanisms seen in magnetotelluric data from Beowawe, Nevada to aid in an interpretation of that area.