This paper describes a simulated surgical setup based on modern, frameless stereotactic techniques that enable surgeons to visualize the field of view of the surgical microscope, overlaid with the segmented volumetric medical images, of a localized area of the patient's head. Using this “true three‐dimensional” navigation system, the surgeon visualizes the surgical site while exploring the inner layers of the patient's anatomy via the surgical microscope. It also allows the surgeon to “fly through,” and around, the site of the surgery to visualize several alternatives and qualitatively choose what he or she believes is the best surgical approach. Moving surgical devices are tracked with stereo vision cameras, allowing determination of their spatial relationship to the target lesion. J Image Guid Surg 1:249–265 (1995). © 1996 Wiley‐Liss, Inc.