Three experiments were carried out to assess the capability of divers to localize acoustic signals underwater and to navigate by them. In the first experiment, divers attempted to determine the correct distance to several underwater transducers projecting acoustic stimuli on a horizontal plane. The second experiment consisted of two related studies where the diver/subjects attempted to discover which of many possible stimuli would produce the most robust perception of underwater "sound movement," or the Underwater Auditory Phi Phenomenon (UAPP). A third experiment consisted of navigational swims by divers; the acoustic stimuli utilized were based on those identified in prior experiments as the most preferred. The results demonstrated that divers are able to discriminate among signals emanating from acoustic sources at various distances underwater and to do so at levels well above chance. Second, divers judged 500-Hz square waves to be the signal which best facilitated an acceptable UAPP; thermal noise and 1-kHz square waves followed in that order. However, these differences were only slight and, in practice, divers maintained that the noise signal was the most useful. Third, it was found that divers apparently can effectively navigate by means of auditory signals alone--at least within certain limits. Finally, a significant decrease in the discrimination abilities of divers for frequencies above 6 kHz suggests that intensity cues may not be as robust as time-of-arrival information with respect to underwater sound localization.