Prediction analysis provides an efficient means of estimating errors in local earthquake hypocenter determinations using a dense array of seismometers. The standard errors of the hypocentral coordinates and the origin time due to random errors in the data and model parameters may be calculated rigorously for a least-squares hypocenter inversion procedure using arbitrary earth models. Contour maps of the estimated standard errors in the hypocenter parameters are plotted for two array configurations and for several earth models and event depths. These maps are useful in predicting the relative accuracy and difficulty of hypocenter location as a function of position in the array, and in selecting events with small relative error to be used in velocity-structure refinement in the vicinity of the array. In particular, the method may be used to provide a means of optimizing array geometry to provide maximum hypocenter control in specific target regions. Tests were made using hypothetical data with prescribed error distributions showing good agreement with the error analysis.