A new image-guided microscope system using augmented reality image overlays has been developed. With this system, CT cut-views and segmented objects such as tumors that have been previously extracted from preoperative tomographic images can be directly displayed as augmented reality overlays on the microscope image. The novelty of this design stems from the inclusion of a precise mini-tracker directly on the microscope. This device, which is rigidly mounted to the microscope, is used to track the movements of surgical tools and the patient. In addition to an accuracy gain, this setup offers improved ergonomics since it is much easier for the surgeon to keep an unobstructed line of sight to tracked objects. We describe the components of the system: microscope calibration, image registration, tracker assembly and registration, tool tracking, and augmented reality display. The accuracy of the system has been measured by validation on plastic skulls and cadaver heads, obtaining an overlay error of 0.7 mm. In addition, a numerical simulation of the system has been done in order to complement the accuracy study, showing that the integration of the tracker onto the microscope could lead to an improvement of the accuracy to the order of 0.5 mm. Finally, we describe our clinical experience using the system in the operation room, where three operations have been performed to date.