Computer-aided surgery (CAS), the intraoperative application of biomedical visualization techniques, appears to be one of the most promising fields of application for augmented reality (AR), the display of additional computer-generated graphics over a real-world scene. Typically a device such as a head-mounted display (HMD) is used for AR. However, considerable technical problems connected with AR have limited the intraoperative application of HMDs up to now. One of the difficulties in using HMDs is the requirement for a common optical focal plane for both the realworld scene and the computer-generated image, and acceptance of the HMD by the user in a surgical environment. In order to increase the clinical acceptance of AR, we have adapted the Varioscope (Life Optics, Vienna), a miniature, cost-effective head-mounted operating binocular, for AR. In this paper, we present the basic design of the modified HMD, and the method and results of an extensive laboratory study for photogrammetric calibration of the Varioscope's computer displays to a real-world scene. In a series of 16 calibrations with varying zoom factors and object distances, mean calibration error was found to be 1.24 +/- 0.38 pixels or 0.12 +/- 0.05 mm for a 640 x 480 display. Maximum error accounted for 3.33 +/- 1.04 pixels or 0.33 +/- 0.12 mm. The location of a position measurement probe of an optical tracking system was transformed to the display with an error of less than 1 mm in the real world in 56% of all cases. For the remaining cases, error was below 2 mm. We conclude that the accuracy achieved in our experiments is sufficient for a wide range of CAS applications.