A technique of "frameless" stereotaxy that allows real-time intraoperative neurosurgical localization is described. The system is composed of four components: a hand-held probe containing two ultrasonic emitters, a microphone array that is rigidly affixed to the operating table in proximity to the surgical field, hardware to control and detect timing of signal production and reception, and a color graphics computer workstation with software to calculate and present the location of the probe tip on reconstructed neuroimaging studies. Unlike previously reported mechanical or sonic navigational devices, this system is adaptable to a wide array of neurosurgical instruments, allows free movement of the operating table and conventional patient draping, and has accuracy in the hostile operating room environment that rivals that of frame stereotaxy. In the operating room environment, using four pulse pairs with the wand positioned optimally, reproducibility of a point in space is +/- 0.6 mm. The wand has a broad range of orientations that maintain error at or below 1.0 mm. The mean error when measuring distances within a 1000-cu cm cube is 1.1 +/- 1.0 mm (1.0% +/- 0.7%). The ability to localize a fourth point (a target) in space is typically within 1.5 mm (using computerized tomography scans with a 1-mm slice thickness) but is dependent on several variables. This technology provides a powerful yet flexible tool in the neurosurgical operating room.