A method for steering a downhole tool in a downhole formation, the downhole tool having a tool axis; a transmitter antenna (T N) disposed within a plane oriented at a first angle with respect to the tool axis; a first receiver antenna (R 1) spaced apart from said transmitter antenna at a first receiver location along the tool axis and disposed within a plane oriented at a second angle with respect to the tool axis, said second angle being different from said first angle, a rotational position indicator attached to said tool for generating an orientation signal indicative of the rotational orientation of the tool with respect to a reference direction, the method comprising the acts of: relating a plurality of measurements to the rotational position of the downhole tool as the downhole tool rotates, said measurements resulting from electromagnetic energy received from said formation in response to transmission of an electromagnetic wave into the formation; using said plurality of measurements of received electromagnetic energy to form a depth-related response signal, wherein the using step includes: operating a processor to generate a first signal based on said measurements at a first rotational orientation of said tool and said electromagnetic wave; operating said processor to generate a second signal based on said measurements at a second rotational orientation of said tool and said electromagnetic wave; and operating said processor to produce the depth-related response signal as a function of borehole depth based on said first and second signals, wherein said depth-related response signal includes a response difference or ratio which is increasingly positive or negative dependent on whether the tool is approaching a bed of higher or lower resistivity and steering the downhole tool in reference to said depth-related response signal. relating a plurality of measurements to the rotational position of the downhole tool as the downhole tool rotates, said measurements resulting from electromagnetic energy received from said formation in response to transmission of an electromagnetic wave into the formation; using said plurality of measurements of received electromagnetic energy to form a depth-related response signal, wherein the using step includes: operating a processor to generate a first signal based on said measurements at a first rotational orientation of said tool and said electromagnetic wave; operating said processor to generate a second signal based on said measurements at a second rotational orientation of said tool and said electromagnetic wave; and operating said processor to produce the depth-related response signal as a function of borehole depth based on said first and second signals, wherein said depth-related response signal includes a response difference or ratio which is increasingly positive or negative dependent on whether the tool is approaching a bed of higher or lower resistivity and steering the downhole tool in reference to said depth-related response signal. operating a processor to generate a first signal based on said measurements at a first rotational orientation of said tool and said electromagnetic wave; operating said processor to generate a second signal based on said measurements at a second rotational orientation of said tool and said electromagnetic wave; and operating said processor to produce the depth-related response signal as a function of borehole depth based on said first and second signals, wherein said depth-related response signal includes a response difference or ratio which is increasingly positive or negative dependent on whether the tool is approaching a bed of higher or lower resistivity and steering the downhole tool in reference to said depth-related response signal.