A calibration method for calibrating an underground beacon and tracker system for use with horizontal directional drilling. The beacon emits a magnetic field, which is received at an above-ground receiving antenna. The antenna is used to locate front and rear null points in the emitted field. The vertical and horizontal offset between the null points is determined to locate the beacon. Then, the magnetic field strength is determined at one of the null points. This value may be used to calculate or update a calibration constant. The calibration constant is then used in subsequent locating step while the characteristics of the underground environment surrounding the beacon remain similar.