Earthquake location using relative arrival time measurements can lead to dramatically reduced location errors and a view of fault-zone processes with unprecedented detail. There are two principal reasons why this approach reduces location errors. The first is that the use of differenced arrival times to solve for the vector separation of earthquakes removes from the earthquake location problem much of the error due to unmodeled velocity structure. The second reason, on which we focus in this article, is that waveform cross correlation can substantially reduce measurement error. While cross correlation has long been used to determine relative arrival times with subsample precision, we extend correlation measurements to less similar waveforms, and we introduce a general quantitative means to assess when correlation data provide an improvement over catalog phase picks. We apply the technique to local earthquake data from the Calaveras Fault in northern California. Tests for an example streak of 243 earthquakes demonstrate that relative arrival times with normalized cross correlation coefficients as low as ∼70%, interevent separation distances as large as to 2 km, and magnitudes up to 3.5 as recorded on the Northern California Seismic Network are more precise than relative arrival times determined from catalog phase data. Also discussed are improvements made to the correlation technique itself. We find that for large time offsets, our implementation of time-domain cross correlation is often more robust and that it recovers more observations than the cross spectral approach. Longer time windows give better results than shorter ones. Finally, we explain how thresholds and empirical weighting functions may be derived to optimize the location procedure for any given region of interest, taking advantage of the respective strengths of diverse correlation and catalog phase data on different length scales.