Multi-modality fusion imaging for targeted prostate biopsy is difficult because of prostate motion during the biopsy procedure. A closed-loop control mechanism is proposed to improve the efficacy and safety of the biopsy procedure, which uses real-time ultrasound and spatial tracking as feedback to adjust the registration between a preoperative 3D image (e.g. MRI) and real-time ultrasound images. The spatial tracking data is used to initialize the image-based registration between intraoperative ultrasound images and a preoperative ultrasound volume. The preoperative ultrasound volume is obtained using a 2D sweep and manually registered to the MRI dataset before the biopsy procedure. The accuracy of the system is 2.3 +/- 0.9 mm in phantom studies. The results of twelve patient studies show that prostate motion can be effectively compensated using closed-loop control.