This paper outlines the effect of horizontal ionospheric gradients on transionospheric path propagation such as for the case of GPS signals. The total electron content (TEC) is a function of time of day, and is much influenced by solar activity and also the receiving station location. To make the model applicable for long baselines, for which the ionosphere is not generally well correlated between receiving stations, the ionospheric gradients should be taken into account. In this work the signal path is determined using a modified ray-tracing technique together with a homing-in method. Results show that horizontal gradients can have a significant effect on GPS positioning for both single station positioning and differential GPS. For differential GPS, the ionospheric delay can, however, be either increased or decreased compared with the case of no gradient, depending on the gradient direction.