An acoustic boundary element (BE) model is used to simulate sound propagation in the lung parenchyma. It is computationally validated and then compared with experimental studies on lung phantom models. Parametric studies quantify the effect of different model parameters on the resulting acoustic field within the lung phantoms. The BE model is then coupled with a source localization algorithm to predict the position of an acoustic source within the phantom. Experimental studies validate the BE-based source localization algorithm and show that the same algorithm does not perform as well if the BE simulation is replaced with a free field assumption that neglects reflections and standing wave patterns created within the finite-size lung phantom. The BE model and source localization procedure are then applied to actual lung geometry taken from the National Library of Medicine's Visible Human Project. These numerical studies are in agreement with the studies on simpler geometry in that use of a BE model in place of the free field assumption alters the predicted acoustic field and source localization results. This work is relevant to the development of advanced auscultatory techniques that utilize multiple noninvasive sensors to construct acoustic images of sound generation and transmission to identify pathologies. (c) 2007 Acoustical Society of America.