Measurement of electrical impedance can discriminate between tissues of different electrical properties. A measurement system with adequate spatial resolution focused on a volume around the tip of a needle or other invasive clinical equipment can be used to determine in which type of tissue the tip is positioned. We have measured the sensitivity zone of a needle electrode with an active electrode area of 0.3 mm(2), and measured impedance spectra in porcine tissue in vivo. Small electrode impedance data will be influenced by electrode polarization impedance (EPI) at low frequencies. To refine existing methods for needle guidance with higher spatial resolution, we have used multivariate analysis and new interpretations of EPI, and tissue data gathered with selected needle electrodes. The focus of this study is on discrimination between muscle and fat/subdermis for drug administration, but our results also indicate that these refinements will facilitate new clinical applications for impedance-based needle guidance in general.