Two first order cardioid microphones in the same point and angled 90° creating the stereo image.

XY stereo set-up is a coincidence stereo technique using two cardioid microphones in the same point and angled at 90° to produce a stereo image. Theoretically, the two microphone capsules need to be at exactly the same point to avoid any phase problems due to the distance between the capsules. As this is not possible, the best approximation to placing two microphones at the same point is to put one microphone on top of the other with the diaphragms vertically aligned. In this way, sound sources in the horizontal plane will be picked up as if the two microphones are placed at the same point.

The stereo image is produced by the off-axis attenuation of the cardioid microphones. While A-B stereo is a difference-in-time-stereo, the XY stereo is a difference-in-level-stereo. But as the off-axis attenuation of a first-order cardioid microphone is only 6dB in 90°, the channel separation is limited, and wide stereo images are not possible with this recording method. Therefore, XY stereo is often used where high mono-compatibility is needed - for example, in broadcasting situations where many listeners still receive the audio on mono equipment.

Since the sound-sources are mainly picked up off-axis when using the XY stereo setup, high demands are placed on the off-axis response of the microphones used. And as described earlier, the use of directional microphones at large distances will reduce the amount of low frequency information in the recording, due to the proximity effect exhibited by the directional microphones.