Abstract: A trace wire is placed alongside an underground utility for long distance transmission of locating tones. The trace wire has a conductive core. There is an electrically insulating sheath on the core. The sheath has an inner layer in the form of a solid foam of dielectric material. An outer layer of the sheath is a solid dielectric material surrounding the inner layer. This combination of a core conductor with insulating materials in a multi-layered design provides significantly improved properties over current commercially available insulated conductors when used as trace wires. In the presently preferred embodiment of the invention, the trace wire construction includes a. 1.6 mm (14 AWG) hard drawn copper conductor to provide low resistance along with high break strength. The inner layer of the sheath is gas injected foamed polyethylene (PE) insulation applied to an overall diameter of 7 mm. The outer layer is solid, medium or high density PE applied over the first layer to an over all outer diameter of 8.