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For pt. I see ibid., vol. 45, no. 5, p. 620-30 (1998). Registration of image space and physical space lies at the heart of any interactive, image guided neurosurgery system. This paper, in conjunction with the previous companion paper (pt. I), describes a localization technique that enables bone-implanted fiducial markers to be used for the registration of these spaces. The nature of these subcutaneous markers allows for their long-term use for registration which is desirable for surgical follow-up, monitoring of therapy efficacy, and performing fractionated stereotactic radiosurgery. The major challenge to using implanted markers is determining the location of the markers in physical space after implantation. The A-mode ultrasonic technique described here is capable of determining the three-dimensional (3-D) location of small implanted cylindrical markers. Accuracy tests were conducted on a phantom representing a human head. The accuracy of the system was characterized by comparing the location of a marker analogue as determined with an optically tracked pointer and the location as determined with the ultrasonic localization. Analyzing the phantom in several orientations revealed a mean system accuracy of 0.5 mm with a ±0.1-mm 95% confidence interval. These tests indicate that transcutaneous localization of implanted fiducial markers is possible with a high degree of accuracy.