A surgical instrument having a grip, a reference structure and an alignment head and method of using. The reference structure has at least one reference element that is registrable in a computer assisted navigation system. The reference element may be a reflective structure for use in an optical tracking system, wire loop for sensing a magnetic field, or other suitable device. The alignment head has a substantially planar alignment surface and may also have a plurality of outwardly extending projections or an electrocautery electrode disposed along an edge of the alignment surface and extending parallel to the alignment surface. The projections may be engaged with an anatomical structure to hold the alignment head in a desired position as the alignment surface is used as a guide to mark the anatomical structure. The disclosed instrument may be used when resecting a femur to prepare the femur to receive the femoral component of a prosthetic hip joint.