A method for installation of an underground pipe includes an initial step of boring a pilot hole through the ground at a predetermined grade angle by extending a drill string having a steerable boring bit mounted thereon through the ground. Upon reaching an end location for the pilot hole, the bit is removed from the drill string, and an expander having a diameter greater than the pilot hole is attached to the drill string, which expander is backed by an impact device such as a pneumatic impactor including a striker that delivers repeated impacts to a rearwardly facing surface of the expander, and by a pipe drawn along behind the expander. The expander is pulled back through the pilot hole at the grade angle while the impactor is operated to aid progress of the expander through the ground and pull the pipe into place behind the expander. Typically in this method the replacement pipe is coupled to a rear end of the expander and the boring bit has a sonde housing containing a sonde attached thereto to indicate to an operator the orientation of a steering face on the boring bit.