In a highly disordered medium, light may be localized in small regions of the size on the order of an optical wavelength. So far most experiments on photon localization are performed on the macroscopic level. We propose microscopic studies of photon localization using a near-field scanning optical microscope and a scanning electron microscope. The interplay of light localization and coherent amplification is a fascinating new field of research. We will investigate the effect of optical gain on light diffusion in a random medium. In addition to experimental studies, we will simulate photon localization numerically with a new approach based on the finite-difference time-domain method. The proposed interdisciplinary research will make a significant impact on condensed matter physics, optics, and laser physics. The proposed educational activities include: (1) establishment of a new multidisciplinary course, Applications of Optics in Medicine and Environmental Science; (2) initiation of an outreach program through the World-Wide-Web; (3) involvement of undergraduate students and high school science teachers in leading-edge research work. %%% Light scattering is a common phenomenon, occurring in clouds and human tissue. The behavior of light in disordered media is of great interest not only to physicists, but also to biologists. One extraordinary phenomenon is photon localization: light can be "trapped" in a micrometer-sized random medium. So far there has been no direct evidence of photon localization. With the recent advance of nanotechnology, we propose to use nanometer-sized tips to directly probe localized photons. In addition to experimental studies, we will calculate photon localization with a new numerical simulation method. By comparing the simulation result with the experimental data, we will gain a deep insight of photon localization and its difference from electron localization. The proposed interdisciplinary research will make a significant impact on condensed matter physics, optics, and laser physics. The proposed educational activities include: (1) creation of a new multidisciplinary course, Applications of Optics in Medicine and Environmental Science; (2) initiation of an outreach program through the World-Wide-Web; (3) involvement of undergraduate students and high school science teachers in leading-edge research work. ***