We present a theoretical framework based on a higher order density correlationfunction, analogous to that used to investigate spin glasses, to describe dynamicalheterogeneities in simulated glass-forming liquids. These higher order correlationfunctions are a four-point, time-dependent density correlation functiong4(r,t) and a corresponding‘structure factor’ S4(q,t)which measure the spatial correlations between the local liquiddensity at two points in space, each at two different times.g4(r,t) andS4(q,t)were extensively studied via molecular dynamics simulations of a binaryLennard-Jones mixture approaching the mode coupling temperature from above inFranz et al (1999 Phil. Mag. B 79 1827), Donati et al (2002 J. Non-Cryst. Solids 307 215), Glotzer et al (2000 J. Chem. Phys. 112 509), Lacević et al (2002 Phys. Rev. E 66 030101), Lacević et al (2003 J. Chem. Phys. submitted) and Lacević (2003 Dissertation The Johns Hopkins University). Here, we examine the contribution tog4(r,t),S4(q,t) andthe corresponding dynamical correlation length, as well as the corresponding order parameterQ(t) and generalizedsusceptibility χ4(t),from localized particles. We show that the dynamical correlation length ξ4SS(t)of localized particles has a maximum as a function of timet,and the value of the maximum of ξ4SS(t)increases steadily in the temperature range approaching the mode couplingtemperature from above.