A complex-valued head-related transfer function (HRTF) can be represented as a real-valued head-related impulse response (HRIR). The interaural time and level cues of HRIRs are extracted to derive the binaural model and also to normalize each measured HRIR. Using the Karhunen-Loeve expansion, normalized HRIRs are modeled as a weighted combination of a set of basis functions in a low-dimensional subspace. The basis functions and the space samples of the weights are obtained from the measured HRIR. A simple linear interpolation algorithm is employed to obtain the modeled binaural HRIRs. The modeled HRIRs are nearly identical to the measured HRIRs from an anesthetized live cat. Typical mean-square errors and cross-correlation coefficients between the 1816 measured and modeled HRIRs are 1% and 0.99, respectively. The real-valued operations and linear interpolating in the model are very effective for speeding up the model computation in real-time implementation. This approach has made it possible to simulate real free-field signals at the two eardrums of a cat via earphones and to study the neuronal responses to such a virtual acoustic space (VAR).