An apparatus and method for locating a magnetic implant in a surgical application using the field of a source magnet for the implant guiding field. The source magnet is an electromagnet having a separate calibrated magnetic field component in addition to the guiding field, so that both the magnitude and orientation of the magnetic field as a function of position around the magnet are known. A magnetic implant is provided with a sensor, such as a three-axis Hall effect sensor, to provide an indication of the magnitude and orientation of an applied magnetic field when the implant is surgically implanted in a patient. After implantation, the source magnet is energized with a current having a modulated component. The modulated component is received and filtered from the signal received from the Hall effect sensor in the implant, and provided to a processor that computes the location of the implant.