Conventional surround sound systems such as 5.1 or 7.1 are limited in that they are only able to produce a two-dimensional (2D) impression of auditory width and depth. Next generation surround sound systems that have been introduced over recent years tend to employ height channel loudspeakers in order to provide the listener with the impression of a three-dimensional (3D) soundfield. Although new methods to position (pan) the sound image in the vertical plane have been investigated, there is currently a lack of research into methods to render the perceived vertical width of the image. The vertical width rendering is particularly important for creating the impression of a fully immersive 3D ambient sound in such applications as the production of original 3D music/broadcasting content and the 3D upmixing of 2D content. This project aims to provide fundamental understandings of the perception and control of vertically oriented image width for 3D multichannel audio. Three objectives have been formulated to achieve this aim: (i) to determine the frequency-dependent perceptual resolution of interchannel decorrelation for vertical image widening; (ii) to determine the effectiveness of 'Perceptual Band Allocation (PBA)', a novel method proposed for vertical image widening; (iii) to evaluate the above two methods in real-world 2D to 3D upmixing scenarios. These objectives will be achieved through relevant signal processing techniques and subjective listening tests focussing on perceived spatial and tonal qualities. Data obtained from the listening tests will be analysed using robust statistical methods in order to model the relationship between perceptual patterns and relevant parameters. The results of this project will provide researchers and engineers with academic references for the development of new 3D audio rendering algorithms, and will ultimately enable the general public to experience a fully immersive surround sound in the home-cinema, car and mobile environments.