Based on the Varioscope, a commercially available head mounted operating binocular, we have developed a head mounted display for augmented reality visualization that seamlessly fits into the infrastructure of a surgical navigation system. This head mounted display, called the Varioscope AR, is equipped with two miniature computer monitors that merge computer graphics with the view of the operating field as seen by the surgeon. Since the position of the Varioscope AR is being tracked by the navigation system's optical tracker, planning data such as the location of a lesion identified on preoperative volume images can be displayed in the correct position transparently overlaying the optical field of view. In order to assess the system's accuracy and the depth perception of a user aiming at a given target, we have designed a phantom for skull base surgery. 16 steel spheres were fixed at the base of a bony skull, and several typical craniotomies were applied. After having taken CT scans, the skull was filled with opaque gelatine in order to simulate brain tissue. The positions of the spheres were registered using VISIT, a system for computer aided surgical navigation. Then attempts were made to locate the steel spheres with a bayonet probe through the craniotomies using VISIT and the Varioscope AR as a stereoscopic display device. Localization using stereoscopic vision with this novel device had a success rate (defined as a first trial hit rate) of 81,5%. Using monoscopic vision, the success rate was found to be 50%. We conclude that the Varioscope AR is now mature for further cadaver tests and clinical studies.