A method for electromagnetic tracking the position and orientation of an object using a discretized numerical field model, rather than the conventional analytical dipole model. The method including the steps of determining a discretized numerical field model associated with a particular distortion source; acquiring mutual inductance signals between electromagnetic sensors and the particular distortion source, the sensors being rigidly attached to a tracked object; estimating an initial position for the tracked object in the presence of the particular distortion source; refining the estimated position of the tracked object; and estimating an orientation of the tracked object.