From the USGA handicapping material. From the center of the tee box along the "designed line of play".
12-1. Starting Point: Permanent Markers
The starting point from which each hole is measured must be defined. Normally the middle of the teeing area is used. (See Course Set-up, Section 15-2.) Opposite this starting point, a visible permanent yardage marker such as a concrete slab, metal plate or pipe set flush with the ground must be installed at the side of the tee. Permanent markers are essential. It is recommended that the hole yardage be visible on the marker. Permanent yardage markers should be installed at the side of each set of tees. If alternate tee areas are used, it is important that permanent yardage markers be installed on each area.
On a nine-hole course, if separate tees or tee-markers are used for each nine of an 18-hole round, separate measurements and permanent yardage markers shall be established for each nine. The yardage markers (and their respective tee-markers) for each nine should be uniquely identifiable.
12-2. Measuring
a. How To Measure
Each hole shall be measured horizontally (air line) by an electronic measurement device, or with steel tape or surveying instruments, from the permanent yardage marker for every teeing area on the golf course to the center of the green. The measurement is along the designed line of play. Any competent individual may perform course measurement, subject to review and checking by the golf association that issues USGA Course Ratings to the golf club. Yardages on the scorecard should accurately reflect this measurement. Accurate measurements to the nearest yard are very important.
A hole with a dogleg shall be measured on a straight line from the tee to the center of the fairway at the dogleg. The measurement shall continue from that point on a straight line to the center of the green.