Abstract: The present invention provides a directional drilling apparatus and method for use in drilling bore holes. The apparatus comprises a plurality of movably mounted cutting elements, wherein the cutting elements are movable between radially retracted and extended cutting positions. A rotary valve is provided for synchronizing the movement of the cutting elements between their respective extended and retracted positions. Control of the directional drilling system is affected by synchronized movement of the cutting elements from an inner to an outer radial position in accordance with the angular position of the drill bit. Means are provided for directing high pressure cutting fluid to the region between the cutting elements and the rotatable body to prevent the accumulation of debris that could prevent movement of the cutting elements. The cutting elements enlarge the bore hole formed by the drill bit, so that the cutting elements continuously engage the wall of the bore hole.