Using digital techniques, the beamsteering and signal‐generation electronics for a parametric array can be packaged in a smaller volume than the array itself. This leads to a new concept for transducers in which these electronics are considered to be part of the transducer. Such a steerable parametric transducer was designed by APL and proper operation was demonstrated during in‐water tests in June of 1975. The drive waveform for the transducer was generated by pulse width modulating a 21‐kHz square‐wave carrier to produce two primary drive frequencies. The difference freqeuncy (nominally 5 kHz) generated by nonlinearities in the water could be held at a particular frequency or could be readily chirped. Electronic beamsteering in two dimensions was achieved by providing a variable time delay for each element of a 2‐dimensional 61‐element array. The variable delay was achieved by varying the rate at which the modulated carrier was clocked through a matrix of shift registers. The nonlinear beam could be steered to a particular angle or scanned by linear variation of the clock frequency. [Work supported under Navy Contract NO0017‐72‐C‐4401.]11