A virtual bone surgery system is being developed to guide a novice surgeon practicing bone surgery operations, as well as to allow an experienced orthopedic surgeon planning and rehearsing bone surgery procedures. The development of this system involves medical image processing, geometric modeling, graphics rendering, haptic rendering, and auditory rendering. It is implemented with a personal computer and a PHANToM^TM device capable of providing the position and orientation information of the virtual tool and generating force feedback. This paper presents the techniques we have devised for the development of this surgery simulation system.