MIDI-generated audio streams or other input streams of audio events are perceptually associated with specific locations in 3D space with respect to the listener. A conventional pan parameter is redefined so that it no longer specifies the relative balance between the audio being fed to two fixed speaker locations. Instead, the new MIDI pan parameter extension specifies a virtual position of an audio stream in 3D space. Preferably, the relative position of a single audio stream is set along a predefined arc in 3D space.