A method of determining the position of celestial X-ray sources which utilizes a modulation collimator rotating about a fixed axis is presented. The signal from each source in the field of view is modulated by a frequency which is fixed by the radial distance from the intersection of the rotation axis and the celestial sphere. The phase of the modulation is determined by the angular distance of the source from a reference line on the celestial sphere. Thus, the modulation function for each source is unique. The data are reduced by the technique of Fourier analysis. Synthesized experimental data for the cases of a single source and for five sources in the field of view are analysed. The ability to distinguish and accurately locate each source in a multiple source field is a major achievement of this method. Sources can be located with an accuracy which is competitive with other methods. An experiment based on this method can be lifted on an Aerobee 150 system.