A new PE model for solving three-dimensional, forward and backward sound propagation in a cylindrical coordinate system is presented. The model marches a wave field in the radial direction including the azimuthal diffraction effects, and solves for a backscattered field based on a three-dimensional, single scattering approach. A periodic sidewall boundary condition is applied for computations in a 360-degree sector, while an approximate sidewall boundary condition is used for calculation in a sector less than 360 degrees. These two sidewall boundary conditions are verified by the numerical results. The major drawback of using the cylindrical coordinate system, when the backscattering solution is valid within a limited area, is analyzed using a geometrical-optical interpretation. The model may be useful for studying three-dimensional backscattering phenomena comprising azimuthal diffraction effects. ©2000 Acoustical Society of America.