A method for the trenchless installation of new underground pipe accurately on line and on grade by microtunneling to install a pilot tube, installing a drill string along the pilot pipe line using a directional drilling machine, installing a back reamer to the drill string and using a directional drilling machine to pull back the reamer and install a product pipe behind the reamer. A pilot tube is installed on line and on grade by utilizing the guidance system of a microtunneling apparatus to install a pilot tubes between jacking and target shafts. A drill string is installed to displace the pilot tubes and a back reamer is attached to the drill string with a product pipe attached to the reamer. The reamer may be pulled using any suitable pulling device such as a directional drilling machine.