Originality: Director strings were developed for combinatory logic as an implementation mechanism. This paper presents for the first time the generalisation of these ideas to the lambda calculus. Rigour: The main properties of the calculus are proved, and abstract machines are derived and implemented to support the theoretical claims. Significance: This work is a crucial element for the current work on optimal reduction. An interaction net implementation of this strategy is used to produce the most efficient lambda evaluator known to date ("Efficient lambda evaluation with interaction nets", RTA'04). The work is also the subject of a research collaboration between the UK, France and Portugal. Impact: This work provided the topic for a successful PhD thesis at one of the top institutions in France (2006). Outlet: Invited submission after RTA 2003.