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Distributed transmit beamforming has recently been proposed as a technique in which several single-antenna sources cooperate to form a virtual antenna array and simultaneously transmit with phase-aligned carriers such that the passband signals coherently combine at an intended destination. The power gains of distributed transmit beamforming can provide increased range, rate, energy efficiency, and/or security, as well as reduce interference. Distributed transmit beamforming, however, typically requires precise synchronization between the sources with timing errors on the order of picoseconds. In this paper, a new two-way synchronization protocol is developed to facilitate precise source synchronization and retrodirective distributed transmit beamforming. The two-way synchronization protocol is developed under the assumption that all processing at each source node is performed with local observations in local time. An analysis of the statistical properties of the phase and frequency estimation errors in the two-way synchronization protocol and the resulting power gain of a distributed transmit beamformer using this protocol is provided. Numerical examples are also presented characterizing the performance of distributed transmit beamforming in a system using two-way source synchronization. The numerical results demonstrate that near-ideal beamforming performance can be achieved with low synchronization overhead.