A method for determining the distance and/or direction of a second earth borehole with respect to a first earth borehole, includes the following steps: providing, in the first borehole, first and second spaced apart magnetic field sources; providing, in the second borehole, a magnetic field sensor subsystem for sensing directional magnetic field components; activating the first and second magnetic field sources, and producing respective first and second outputs of the magnetic field sensor subsystem, the first output being responsive to the magnetic field produced by the first magnetic field source, and the second output being responsive to the magnetic field produced by the second magnetic field source; and determining distance and/or direction of the second earth borehole with respect to the first earth borehole as a function of the first output and the second output.