A drill bit (6) is equipped with one or more fluid jets (7) that are activated during a portion of the rotational movement of the drill bit (6). A processor (41) located with other down-hole sensors (33-38), is programmed with parameters defining the desired path of the borehole (8). The sensors (33-38) determine the actual spatial location of the drill bit (6) and provide the processor (41) with corresponding information. The processor (41) compares the actual drilling path to the desired path, and if a correction is required, a switching module (3) allows a pressurized drill fluid to be sequentially switched to selected jets (7) during rotation of the drill bit (6) to thereby erode the formation in a direction toward the desired path. With this arrangement, the problems of directional control by surface-located equipment are overcome.