Objective: The purpose of this study was to evaluate a test of virtual auditory localization including assessment of its ease of administration and its sensitivity to differences in binaural performance in children and adults. This test eliminates many potential problems inherent in any free-field localization test such as calibration problems, problems replicating source and listener locations, and issues associated with head movements. Design: Binaural performance was measured using the virtual localization test and a simple binaural detection task, the masking-level difference (MID), for three groups of subjects: adults, children with a negative history of otitis media, and children with a positive history of otitis media. There were five subjects in each group. The adults were all student volunteers; the children were recruited first and subsequently placed into groups based on their medical histories obtained from their physicians and parental reports. Results: Results indicate that this test of virtual auditory localization is useful for measuring binaural performance in children and adults and is sensitive to differences in binaural processing. Performance of the adults and children with a negative history of otitis media was comparable on both of the binaural tests, and on the binaural detection task, was similar to that reported in the literature for normal-hearing listeners; but the children with a positive history of otitis media performed more poorly on both tests. Conclusions: The results of this study indicate that the virtual localization test described here is easy to administer to children and adults. The signal processing techniques used in this virtual auditory localization test lend themselves to straightforward comparisons across different laboratories and clinics and make this test a potentially useful clinical tool. The development of such a clinical test is currently under study.