A system for tracking and steering a downhole tool using an augmented reality device. A tracker tracks the location of a downhole tool as it moves underground and transmits data to the device, while one or more sensors measure a position and orientation of the device. The device analyzes the data received from the tracker and the sensors and generates a virtual image of the downhole tool. The virtual image is displayed on the device at its detected location relative to the ground surface and relative to the position of the device. The position of the displayed virtual image is modified in response to updated information from the tracker or the sensors. Virtual images representing various parameters of the drilling operation are also displayed on the device in juxtaposition with the virtual image of the downhole tool.