Theory and some empirical evidence would predict that humans should exhibit little ability to localize sounds underwater; however, other observations seemed to contradict this position. In order to provide relavant data on the issue, a pilot study was conducted; its results suggested that man can localize sounds underwater—at least to some degree. Accordingly, a major experiment was carried out utilizing 17 divers, who were free to move their heads but not their bodies, in an underwater localization task. In order to allow precision in the experiment, a Diver Auditory Localization System (DALS) was developed; its design is based on previous structures employed in underwater communication research and consists of an open polyvinyl choloride (VPC) framework to which five 3‐m arms and other equipment are attached. The five arms allowed placement—at ear level—of underwater projectors at angles (to the diver) of 0°, 45°, 90°, 270°, and 315°. Subjects responded to four different signals—250‐, 1000‐, and 6000‐Hz sinusoids and thermal noise—at 110 dB SPL (re0.0002 dyn/cm2); this level is approximately 40 dBreunderwater hearing thresholds. Responses to stimuli were accomplished by means of a specially constructed five‐position underwater switch coupled to an IBM key punch at the surface. The obtained scores were substantially above chance and demonstrate that humans are capable of at least some sound localization underwater.