A method of detecting a localization element/sheath state change with a localization system includes establishing a localization field using a plurality of localization field generators, obtaining first and second localization signals from first and second catheter-borne localization elements within the localization field, respectively, comparing the quadrature components of the first and second localization signals, and detecting a localization element/sheath state change for one of the catheter-borne localization elements based on the comparison between quadrature components. For example, withdrawal of a localization element into an introducer sheath can be detected when the comparison between quadrature components exceeds a preset amount. Conversely, re-emergence of the localization element from the introducer sheath can be detected when the comparison between quadrature components returns below the preset amount..
