Binaural reproduction is one of the promising approaches to present a highly realistic virtual auditory space to a listener. Generally, binaural signals are reproduced using a set of headphones that leads to a simple implementation of such a system. In contrast, binaural signals can be presented to a listener using a technique called “transaural reproduction” which employs a few loudspeakers with crosstalk cancellation for compensating acoustic transmissions from the loudspeakers to both ears of the listener. The major advantage of transaural reproduction is that a listener is able to experience binaural reproduction without wearing any device. This leads to a more natural listening environment. However, in transaural reproduction, the listener is required to be still within a very narrow sweet spot because the crosstalk canceller is very sensitive to the listener's head position and orientation. To solve this problem, dynamic transaural systems have been developed by utilizing contact type head tracking. This paper introduces the development of a dynamic transaural system with non-contact head tracking which releases the listener from any attachment, thereby preserving the advantage of transaural reproduction. Experimental results revealed that sound images presented in the horizontal and median planes were localized more accurately when the system tracked the listener's head rotation than when the listeners did not rotate their heads or when the system did not track the listener's head rotation. These results demonstrate that the system works effectively and correctly with the listener's head rotation.