Biopsy of the prostate using ultrasound guidance is the clinical gold standard for diagnosis of prostate adenocarcinoma. The current prostate biopsy procedure is limited to using 2D transrectal ultrasound (TRUS) images to target biopsy sites and record biopsy core locations for postbiopsy confirmation. Localization of the 2D image in its actual 3D position is ambiguous and limits procedural accuracy and reproducibility. We have developed a 3D TRUS prostate biopsy system that provides 3D intrabiopsy information for needle guidance and biopsy location recording. The system conforms to the workflow and imaging technology of the current biopsy procedure, making it easier for clinical integration. In this paper, we describe the system design and validate the system accuracy by performing mock biopsies on US/CT multimodal patient-specific prostate phantoms. Our biopsy system generated 3D patient-specific models of the prostate with volume errors less than 3.5% and mean boundary errors of less than 1 mm. Using the 3D biopsy system, needles were guided to within 2.3 +/- 1.0 mm of 3D targets and with a high probability of biopsying clinically significant tumors. The positions of the actual biopsy sites were accurately localized to within 1.5 +/- 0.8 mm.