Purpose: To evaluate the accuracy of a novel combined electromagnetic (EM) navigation/image fusion system for biopsy of small lesions. Materials and Methods: Using ultrasound (US) guidance, metallic (2 × 1 mm) targets were imbedded in the paraspinal muscle ( n = 28), kidney ( n = 18), and liver ( n = 4) of four 55- to 65-kg pigs. Baseline helical computed tomography (CT) imaging (Brilliance; Philips) identified these biopsy targets and six and nine cutaneous fiducial markers. CT data were imported into a MyLab Twice system (Esaote, Genoa, Italy) for CT/US image fusion. After verification of successful image fusion, baseline registration error and respiratory motion error were assessed by documenting deviation of the US and CT position of the targets in real time. Biopsy targeting was subsequently performed under conditions of normal respiratory using 15-cm 16G eTrax needles (Civco). To mimic the conditions of poor US visualization, only reconstructed CT information was displayed during biopsy. Accuracy of targeting was measured by repeat CT scanning as the distance of the needle tip to the target center. Targeting accuracy of free-hand vs. guided technique, and electromagnetic (EM) sensor positioning (ie, on the hub or within the needle stylus tip) were evaluated. Results: In muscle, needle registration error was 0.9 ± 1.2 mm and respiratory motion error 4.0 ± 1.0 mm. Target accuracy was 4.0 ± 3.2 mm when an EM sensor was imbedded in the needle tip. Yet, with the EM sensor back on the needle hub, greater targeting accuracy was achieved using an US guide (3.2 ± 1.6 mm) vs. freehand (5.7 ± 3.2 mm, P = .04). For kidney, registration error was 1.8 ± 1.7 mm and respiratory motion error 4.9 ± 1.0 mm. For the deeper kidney targets, target accuracy was 4.4 ± 3.2 mm with a tip EM sensor, which was an improvement over the hub EM sensor positioning (9.3 ± 4.6 mm; P < .01). An additional source of fusion error was noted for liver. Beyond 17 ± 1 mm of respiratory motion, targets were observed to move >3 cm with US transducer/needle compression resulting in 14 ± 1.4 mm targeting accuracy. Conclusions: A combined image-fusion/EM tracking platform can provide a high degree of needle placement accuracy (<5 mm) when targeting small lesions. Results fall within accuracy of respiratory error; with best results obtained by incorporating an EM sensor into the tip of the biopsy system.