The maintenance of balance and posture is a result of the collaborative efforts of vestibular, proprioceptive, and visual sensory inputs, but a fourth neural input, audition, may also improve balance. Here, we tested the hypothesis that auditory inputs function as environmental spatial landmarks whose effectiveness depends on sound localization ability during ambulation. Eight blindfolded normal young subjects performed the Fukuda-Unterberger test in three auditory conditions: silence, white noise played through headphones (head-referenced condition), and white noise played through a loudspeaker placed directly in front at 135 centimeters away from the ear at ear height (earth-referenced condition). For the earth-referenced condition, an additional experiment was performed where the effect of moving the speaker azimuthal position to 45, 90, 135, and 180° was tested. Subjects performed significantly better in the earth-referenced condition than in the head-referenced or silent conditions. Performance progressively decreased over the range from 0° to 135° but all subjects then improved slightly at the 180° compared to the 135° condition. These results suggest that presence of sound dramatically improves the ability to ambulate when vision is limited, but that sound sources must be located in the external environment in order to improve balance. This supports the hypothesis that they act by providing spatial landmarks against which head and body movement and orientation may be compared and corrected. Balance improvement in the azimuthal plane mirrors sensitivity to sound movement at similar positions, indicating that similar auditory mechanisms may underlie both processes. These results may help optimize the use of auditory cues to improve balance in particular patient populations.