We present a new incremental radial basis function network suit(cid:173) able for classification and regression problems. Center positions are continuously updated through soft competitive learning. The width of the radial basis functions is derived from the distance to topological neighbors. During the training the observed error is accumulated locally and used to determine where to insert the next unit. This leads (in case of classification problems) to the placement of units near class borders rather than near frequency peaks as is done by most existing methods. The resulting networks need few training epochs and seem to generalize very well. This is demonstrated by examples.